Mortgage Refinance Levels Reach High Levels as Mortgage Interest Rates Remain at Low Levels

According to the latest records from the Mortgage Bankers Association or more famously known as the MBA as of July. 20, 2012, the applications for mortgage loans have significantly grown by 0.9 percent compared to last week.

The tool used to measure the volume of the applications is the Market Composite Index, and the final result of last week’s mortgage loans has equaled to a 0.9 increase in the results of both the adjusted and unadjusted percentages compared to the previous week. The Refinance Index however, increased to about 2 percent this is the highest it has been since the April of 2009. The only results that have decreased are the Purchase Index which is being adjusted every season. The decrease has been noted at 3 percent, which is its lowest point since June of 2012.

Other results show that the refinance share for the mortgages has increased by 1 percent compared to the preceding weeks, the adjusted-rate mortgage or the ARM share is now 4 percent of the accumulated activities compared to the previous week as well.

The 3.74 percent average contract interest for a fixed mortgage rate has remained. This is the lowest it has been since the survey had begun. The points have also slipped to 0.43 from the previous 0.45 that included the origination fee in a loan-to-value ratio loan for 80 percent. Furthermore, the 30-year fixed rate has been under 4 percent since May 4 this year and the effective rate has also fallen from the previous week.

The 30 year fixed-rate mortgage loan’s average contract interest which is more than $417,500 has risen from 3.98 to 3.99 percent and its points have fallen from 0.32 to 0.28 with the origination fee for LVT loans offered in 80 percent rate.

The average contract interest rate for a 30 year fixed mortgage according to the FHA has fallen to only 3.52 percent which is the lowest it has ever been.

Mortgage Deals: What You Should Know

Feeling discouraged with the current situation in finding a mortgage fit for your needs? You may have heard from various stories from relatives and friends about how difficult it is to shop for mortgage nowadays. Borrowers are still provided the loans that they need by lenders, and these deals often have rates that are low and budget friendly. But if you want a good deal like this one, then you have to learn how to find them.

The first step in looking for a great deal is to get organized. In this process you have to look for information, gather and look over many potential lenders. To help you with this stage, the HUD provides free good faith estimate forms that you can use to compare the offers of different companies for a loan. The CFPB also has a standardized mortgage disclosure it is working on in the present which can help you in your search for mortgage companies.

The next step is to check your credit. It is a rule of thumb that one must know his credit information. You can get a copy of your credit report from the three major reporting institutions through this site: AnnualCreditReport.com. Knowing where your credit stands is vital in negotiating the rate and the loan you are going to get. Furthermore, you need to be firm on what you want. You have to know how much you can afford in a month; you have to determine if you would settle for a 30-year or 15-year rate.

Another step is to look for different alternatives. This may be a confusing experience because when you start applying to many lenders, they will give you different statements on your loan. You have to make sure you really understand the terms of your loan. You also have to keep in mind that full application and a credit background check will often not result to an accurate rate estimate from the lenders.

Shopping for mortgage can be a real hassle and often times you might get frustrated, but you have to keep in mind that if you are to succeed in this endeavor, you are more likely to get the dream home or the business you always wanted.

Student Loans: New Subprime Crisis in The Making

For those students having trouble paying for college, government-backed student loans are a much more popular option than private student loans. This is because the interest rates are lower and there are more flexible repayment options. In contrast, private student loans require repayment as soon as the borrower graduates and repayment terms are rigid.

According to a recent report from Consumer Financial Protection Bureau concerning the private student loan market, beginning in the middle of 2000, there had been a growing number of students relying on private loans before they had exhausted all possible federal loans presented to them.

The growth in terms of the private student loan market, which increased from $5 billion in the year 2001 to $20 billion in the year 2008, is almost similar to the growth of subprime mortgage loans during the same time.

Banks discovered that they could package student loans into securities and trade them for a profit to investors. By means of securitization, $100 in student loans could be converted into $105. Because the initial lenders were not hanging on to the loans, they were not in danger if students failed to pay the loan.

Some time ago, a filter operation had been provided by universities, notifying students to the accessibility of private loans when the rest of the alternatives were exhausted.

However, the increase in private student loans is also indicated by an increase in direct-to-consumer lending. Most of the time, these students were not aware that the private loans are less preferred compared with those offered by the government.

The conditions were most extreme at for-profit colleges, a lot of whom had financial connections with private lenders. Based on a report from the CFPB, in the year 2008, a private loan was taken on by 42 percent of undergraduates at for-profit colleges. However, only 14 percent of all undergraduates used a private student loan.

Payday Loan House Bill for Pennsylvania

According to CFPB, most loans are for hundreds of dollars and are charged with $15 or $20 for every $100 borrowed. Payday loans typically have a two-week term and fees amount to a percentage rate between 391 percent and 521 percent every year.

Depending on the state law, loan amounts and finance charges can differ. If the borrower fails repay the loan in full by the time the due date comes, then the lender is allowed by the loan agreement to cash the check of the borrower in order to get repayment.

There has been an increase in payday lenders across the country within the last two decades. Moreover, payday loans can now be availed online, with the arrival of new media.

According to the report from PBS during the month of May, almost 19 million US households use payday loans. According to industry analysts, this totals to $30 billion in short-term credit annually. While this is not yet a problem for Pennsylvania, it could be in the near future.

Philadelphia Daily News reported that Republican state Rep. Chris Ross sponsored a House bill that would introduce short-term lending to Pennsylvania, where it was originally forbidden. Ross believes that by doing so, a safer alternative will be offered to Pennsylvanians who currently take on loans from Internet companies that can resell their personal information.

According to John Rabenold, a lobbyist for payday lender Axcess Financial, the House bill is considered to be an opportunity for Pennsylvania residents that would provide jobs and cash for financial literacy programs. In addition, Rabenold said that he is aware there is a demand for short-term credit and there is also a supply for it, but he thinks that there is a cheaper and better way of service.

However, Diane Standaert, legislative counsel at the Center for Responsible Lending, opposes the legislation and said that it is a very bad idea.

What is a Car Title Loan?

When you need to borrow money for a car and you are currently insolvent, then title loans is a good tool for that. Mortgage for an automobile could cost you $175 to $2,500 and the terms of payment would be within 30 days maximum, this is according to some State laws. However, this may not be the case all the time because in some states the loans could rage up to 30% in a month. This would cost a customer a 360% of annual percentage rate, and most of the time, lenders to these loans are granted the additional origination fees.

These lenders are often in service out in storefront destinations and they also accept check cashing and pawned items.

If you have no clue what a title loan is, then here is an example: you sign a document that binds you to a state law with interest that you have to pay within 30 days. You taking this title loan of $500 mean you are relinquishing your car title for collateral. If you fail to pay the collateral then your car will be repossessed. Aside from this car title loan you are going to give, you also have to pay the company a $15 origination fee. The typical rate for the interest is at 30% that is about 150% total interest.

Usually, these kinds of loans do not allow partial payments, so if you cannot pay it in full the lender may permit you to pay off within another 30 days but you must pay additional interest charges.  This however is only allowed four times in some states.

So, how much does a loan cost? First, you have to pay a $15 origination fee and a $450 interest that is computed by the monthly interest rate in this case, $150 and the number of months you have to pay it 3 months. So the total cost will be $465 in an interest to get a hold of $500.

It will be wise to think very well whenever you have to engage in a car title loan. Not only are the interests and the fees high, but your car is also in a great risk.