Default risk is up for conventional loans! What on earth does this
mean? Unfortunately it means that more people are not paying their mortgages. That’s
a bummer! It’s not up much, 0.4% since December and 0.8% since January 2014. However,
it’s the fifth month in a row that there’s been an increase, so that’s
concerning. But, why the uptick? Inquiring minds want to know…
I wish I had the answer, but I’m afraid there’s more research to
be done to find out, such as the LTV of these loans, where they are, credit
profile-- and that information usually doesn’t get sorted out for a while.
So, why should you care?
The most important thing when purchasing a home is to make sure
you get the best mortgage for you. Yes, for you. Not for your parents, not for
your neighbor, or co-worker; for you. People talk with each other about getting
the lowest rate, but don’t always realize that there’s much more to consider. Getting
the best mortgage for you helps you feel confident that you can comfortably
make the monthly payment and know your purchasing power. There are many nuances
to the mortgage world; the rules and regulations change quickly, and in some
cases, often. For example, if you are just shopping for interest rate and don’t
have 20% for a down payment, your loan will require mortgage insurance which
will increase your monthly payment substantially compared to a payment that a
basic mortgage calculator might show you after only calculating an interest
rate. Also, different loans have different mortgage insurance rates. Hmm, see
how this gets complicated? Also, you may have the option of two loans-- a first
and second lien instead of one loan with mortgage insurance.
What does this mean to you?
Shop for the best licensed lender, not the best rate. The best
licensed loan officer will take a full loan application from you and let you
know all your options. There are many loan programs available, especially for
first time homebuyers. Review loan programs in detail and ask questions about
each so that you are comfortable and understand each of your options. It’s extremely
important to understand all the different pieces of the monthly payment, what
can change, when, and, why. Just because you have a fixed-rate mortgage, it
doesn’t mean your monthly payment will stay the same over the life of the loan.
Your mortgage insurance, property taxes, and homeowners insurance can change
and affect your monthly payment.
To
get on our waiting list for my new book, How
To Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye,
go to our website www.bestmortgagebook.info
For video mortgage tips, subscribe to our YouTube Channel: https://www.youtube.com/watch?v=YsL6BuJ8b-M
For video mortgage tips, subscribe to our YouTube Channel: https://www.youtube.com/watch?v=YsL6BuJ8b-M
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