June 2010

Found 2 blog entries for June 2010.

So, you have an adjustable rate mortgage, what to do, what to do?

A lot of consumers took advantage of low mortgage rates five years ago by taking out an adjustable rate mortgage. These mortgage loans, generally fixed for 3 years or 5 years, 7 years or 10 years, allowed consumers to save thousands of dollars in interest by having an interest rate below the rate of a fixed rate mortgage.

For example, on a $300,000 mortgage, in November of 2004, you could get a 5/1 ARM (principle and interest payments) at 4.5%. The comparable 30 year fixed rate loan at the time was around 5.375%, giving the adjustable rate mortgage a monthly savings of $159 per month . . . or $9,540 over the first 60 months (5 years fixed term). Saving $10,000 is good, not toxic, or

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On January 1, 2010, the new standardized (nationalized) Good Faith Estimate went in to mandatory use.  The intent of the form was to create a standard disclosure for all mortgage providers -- better allowing consumers to shop for a mortgage, make comparison of loan options, closing costs, etc.  In the first sense (to create a single standardized form), the new Good Faith Estimate has succeeded.  In a few other areas, the new form is a giant headache.  So, to help you understand the new 2010 Good Faith Estimate, here is the good, the bad and, well, what you need to know to avoid getting the previously mentioned headache (the ugly).

First, the good:

  • the new form gives a very good summary of loan terms (I honestly think that it should be renamed "A
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