How to Qualify for a Mortgage Rate Below 4 Percent

Based on data from Freddie Mac last Thursday, the average rate on a 30-year fixed-rate mortgage was 3.66 percent, together with a fee of 0.7 percent of the mortgage amount, which is also equivalent to a rate of 3.81 percent with no fee.

The agency found out that it is the lowest interest rate since it started tracing the numbers during 1971. In the same period of the previous year, the interest rates were 4.51 percent.

In order to get a loan with this interest rate, the borrower must have a credit score of 740 or higher and be able to pay deposit of 25 percent or higher. Taking this into consideration, the borrower will more likely only pay a little bit more with a minimum of 20 percent in home equity.

On the other hand, borrowers with a credit score between 720 and 739 will also pay a little bit more, provided that they also comply with the general approval standards.

However, if you have a low credit score and are financing a smaller sum of your home’s value, then you might still be eligible to get the same low rate mortgage just like those with higher credit scores. According to Mark Maimon, the director of sales at Universal Mortgage in Brooklyn, someone that has a 700 score and financing 50 percent of the home’s value can also get the same rate as someone with an 800 score and financing 75 percent.

Nevertheless, if your credit score is low, you might be required to either pay a huge amount as deposit or have a large number of money in the bank. If not, then you might not be eligible for a low rate mortgage.

As a result, a lot more borrowers have ask for help from the loan program of the Federal Housing Administration, which is more merciful.

Attempt to Resolve Home Loan Rates Begin

According to the most recent figures from the Reserve Bank, the floating rate mortgages is 61.7 percent of the overall mortgage lending by banks for the month of May, which is a decrease from the 63.1 percent during the month of April.

Consequently, it is the first monthly decrease ever since August of the previous year, in which floating rate mortgages was 56.3 percent of the overall mortgage lending. However, the figures during August a year ago was obviously an irregularity given that the floating rate mortgages percentage had been increasing ever since August of the year 2009, where it was 22.8 percent of the whole.

The size of the shift is happening into the one to two-year fixed rates which make up 13.3 percent of the whole during the month of May, an increase from the 11.8 percent during April and 9.6 percent during February. The most popular were pre-GFC, two-year fixed-rate mortgages.

Based on figures from other central banks, the price war has caused mortgage approvals to extensively increase but credit growth has hardly increased.

There was an increase in the household credit growth of 0.2 percent during May for a third consecutive month and a progress of the zero to 0.1 percent growth observed during the last seven months. On the other hand, the growth during May 2007 was 1 percent and 1.1 percent during May 2006.

According to Nick Tuffley, the chief economist of ASB Bank, the credit growth figures are already the net and are being restrained considerably by insurance payouts in Christchurch but the rebuilding is just starting.

The net mortgage lending increased by only 1.5 percent from that of May in the previous year but the $558 million growth during May was significantly higher than the $343 million growth during April.

In addition, Tuffley said that the growth for the month of May is the highest since October 2009. It is estimated that lending will be even stronger for June.

CFPB Informs Seniors of the Hazards of Reverse Mortgages

Based on a report by the government, a lot of older Americans are in danger of ending up in a bad condition due to misunderstanding of the loans’ complicated terms.

According to information from the Consumer Financial Protection Bureau, there is an increasing tendency for the older to get the money at a young age and in aggregate rather than of installments paid every year which intended to allot the money through their retirement.

Homeowners failed to pay 10 percent of reverse mortgages since they cannot continue with the mandatory payments for property tax and insurance. CFPB was concerned about the growing use of the product through the last ten years and was exploring into new policies. Moreover, the difficulty of terms of reverse mortgages causes scammers to target the seniors.

Hubert Humphrey III, head of the Office of Older Americans and former Minnesota attorney general, said that while reverse mortgages may be suitable in certain situations, the seniors are still confused about its details.

CFPB is thinking about insisting on better explanation of the reverse mortgages terms and more rigorous monitoring, together with restrictions on ambiguous advertising.

According to Norma Garcia, a senior attorney of CFPB, reverse mortgages are an expensive option in borrowing money.

Reverse mortgages are intended for people 62 years and older who want to get loans based on the equity of their homes. However, homeowners are not required to pay every month, unlike the typical home equity loan. In addition, a reverse mortgage loan is less difficult to qualify for compared to a home equity loan.

Richard Cordray, CFPB’s director, said that although reverse mortgages are a good option for seniors who want to improve their retirement income which does not involve selling their home. A lot of seniors know about reverse mortgages but they have trouble comprehending the product and the trade-offs that comes with it.

Student Loan and Highway Jobs Bill Approved by The Congress

Last Friday, the Congress approved the bill that will save 2.8 million jobs on construction and transportation, and also preventing an increase in the interest rate of loans for college students.

The bill allows more than $100 billion to be financed on highway, mass transit and other transportation projects for the next couple of years.

Also last Friday, a one-week temporary measure was signed by President Barack Obama, allowing highway and loan programs to carry on until the legislation arrives at his office.

As stated in the bill, the subsidized Stafford loans with interest rates of 3.4 percent will persist for one more year. If the order was not approved, interest rates would have increased twice as much to 6.8 percent for 7.4 million college students anticipated to apply for the loans for the next year, which will add $1,000 to the cost of every loan.

Moreover, the bill strengthens federal transportation projects and provides states more flexibility in terms of spending money from Washington. It also includes a range of safety initiatives intended for improving bus safety.

According to Jay Carney, the spokesperson of the White House, the Obama administration was happy that the Congress took actions before the families suffer from their inaction. Carney also said that Obama will pursue for approval of his last year’s proposals that will offer more jobs to the public, to employ teachers, police officers and firefighters.

In addition, to able to increase other revenue, the government will begin to charge the subsidized Stafford loans with interest rates in not more than six years after the start of studies of undergraduates. As of now, there are no interest rates charged until after they graduate.

The bill further extends the federal flood insurance programs that defend 5.6 million households and businesses. It also reallocates 80 percent of the penalties from the Clean Water Act to the 2010 Deepwater Horizon oil rig explosion that affected five Gulf beaches and waters.

Savannah, Mo. Former Treasurer Faces 52 Federal Charges of Fraud

A woman is currently being charged of 52 federal offenses after she illegally got her hands on over $900,000.

Vicky D McDonell, a 61 year old is facing the federal grand jury for allegedly obtaining cash illegally from two companies from Savannah, Mo. She will soon be facing complaints of fraud; 44 of them are wire fraud, 4 are bank frauds, 3 mail fraud and aside from fraud she is facing a count for false statement. McDonell is looking at 75 years imprisonment if she is proven guilty of all the offenses.

The documents in court say that McDonell started to loot from the companies since 1997 when she held the position of treasurer and also a partner to MPC Billboards Inc. and Max Pro Consultants Inc.

These two companies are operational in Savannah, Mo., and are owned of business men Guy Defenbaugh, Fred Ramsay and James Morten.

According to the court, McDonell held the books of the companies, she also oversaw the operations in the office, she took head of the financial department, took care of the bills and billed and collected the account receivables from customers. She did all the financials for the companies without the supervision of the three owners; they had trusted everything to her completely.

The accused treasurer is being suspected of having written herself checks from the business to take care of her personal expenditures. These include her automobile payments, renovation and landscape makeover of her house, and even gifts. She also had unauthorized loans and checks written to her children and her mother for over $35,000 she has done this for almost 12 years.

Moreover, Ms. McDonell was said to have used the credit card of the company to pay for her own expenses and arranged that the cash statements would be mailed to her home address.

It was also said that she may have overpaid her own salary by $392,695. According to the FBI, she has given confessions to stealing some of the money. If she is proven guilty she is going to have to relinquish properties that she had gotten from the scheme and proceeds from $906,425.25 with interest.