Real Estate & Mortgage

Zillow opens up new mortgage biz

Zillow.com is an online real estate community where homeowners, buyers, sellers, real estate agents and mortgage professionals find and share vital information about homes, for free.  Zillow's goal is to help people become smarter about real estate in every stage of the home ownership process -- buying, selling, remodeling and financing. The company is headquartered in Seattle and has raised $87 million in funding. Zillow.com, Zillow, Zestimate and Zindex are registered trademarks of Zillow, Inc.

"What most people don't realize is the type and terms of a loan are often more significant than the actual purchase price as these factors can dramatically affect the affordability of a home," said Spencer Rascoff, Zillow chief financial officer. "Financing a home is one of the largest investments most people will make in a lifetime yet people typically put more time into buying a car and as much time into researching a single vacation than they do a home loan. Despite this clear imbalance of effort, we're encouraged that borrowers, on average, say they plan to secure more quotes on the loan they plan on obtaining or refinancing within the next year, which we think signals a desire for greater options and information to help alleviate the primary concerns of borrowers."

Mortgage MArket:What Me Worry?

The majority of mortgage products have been unaffected by troubles in the subprime segment. Interest rates for 30-year, fixed-rated loans remain in the low 6 percent range for people with reasonably good, though not necessarily perfect, credit records, according Kenneth R. Harney, managing director of the National Real Estate Development Center and syndicated columnist.

Hard Money Lender is Moody

Subprime Time for Lender Accredited Home Lenders Holding Co. a hard money lender has responded to news that Moody's Investors Service has decided to place the company and four other lenders on review for possible ratings downgrades. Earlier this week, Moody's Investor Service said it was placing five subprime lenders, some of which are subsidiaries of larger corporations, on review. The list included Irvine, California-based New Century Financial Corp., Accredited Home Lenders, Orange, California-based Ameriquest Mortgage Co., Littleton, Colorado-based Specialized Loan Servicing, and Kansas City, Missouri-based NovaStar Financial.

Chances of price declines?

PMI Mortgage Insurance Co.'s says that there's a 32.8 percent chance that home prices will decline in the next two years. Risk index scores increased for all of the nation's 50 largest metropolitan areas and 18 of these metros face a greater than 50 percent chance that home prices will decline, up from 13 last quarter.

PMI Removal

Interest Rates and the Fed

Recent moves by the fed did not impress  Freddie Mac as they  released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.58 percent, with an average 0.5 point, for the week ending May 11, 2006, down from last week's average of 6.59 percent.

Overnight Interest Rates

Overnight Rates on Mortgages

3/1 adjustable rate mortgages start at 6.25%

5/1 adjustable rate mortgages start at 6.25%

7/1 adjustable rate mortgages start at 6.25%

15 year fixed rate mortgages start at 6.375%

20 year fixed rate mortgages start at 6.5%

30 year fixed rate mortgages start at 6.625%

Home Equity Line Of Credit

A Quick Look At Home Equity Line Of Credit

What do you mean by home equity line of credit?

To borrow a sum of money against your homes equity is popularly known as a home equity line of credit. You can use this amount to reconstruct or renovate your home, to pay your medical bills, to finance a new purchased home, to consolidate your high interest debts or for higher education of any of your family members.

Is a home equity line of credit perfect for you?

How Lender's Set Mortgage Rates

Ever wonder how lender's come up with the rates they do? You can stop wondering, cause I'm going to tell you how. We all answer to a higher mortgage rate power, namely the secondary market. The secondary market is where Fannie Mae, Freddie Mac, and other mortgage lenders ply their trade. These government founded agencies purchase the loans that lenders make, then either hold them in their portfolios, or bundle them with other loans into mortgage-backed securities. Those securities are then sold to mutual funds, Wall Street firms, and other financial investors who trade them the same way they trade other securities and bonds.

-------------------------
Todays Mortgages are available to save you hundreds if not thousands off your home loan.

Be sure to check out several of the resources in order to find your best rate.
-----------------------

As a result investors, rather than mortgage brokers and bankers, are in control of the rates. When economic news suggests the economy is heating up, investors demand higher yields from the lenders. This happens because they don't want to buy low yield bonds now, in case the Fed raises rates to cool the economy, which would mean they will make higher yield bonds later. The only way that lenders can get their loans sold in this situation is to raise the yields they offer investors. In turn, this drives the rates higher for consumers.

pay adjustable rates mortgage

PayOption adjustable rate mortgages start at 1.25%
3/1 adjustable rate mortgages start at 6.25%
5/1 adjustable rate mortgages start at 6.375%

7/1 adjustable rate mortgages start at 6.375%
15 year fixed rate mortgages start at 6.25% 30 year fixed rate mortgages start at 6.50%

Home Mortgage Calculator

Use A Mortgage Calculator To Guide Your Home Equity Loan Decision 

The difference between a home loan and a home equity loan lies mainly in that the home equity loan, also known as a second or even third mortgage, is issued at a higher interest rate. This interest rate is lower than you could expect to pay on a credit card, but it will be still higher than the original interest rate.

Use a home equity mortgage calculator to see what releasing different percentages of your equity makes to the payments required. The mortgage calculator then allows you to compare whether this is the best course of action open to you.

----------------------------------
Overnight  Mortgage Loan averages

LOAN TYPE  TODAY +/- LAST WEEK   
30 yr fixed mtg  6.11%  6.11%   
15 yr fixed mtg  5.78%  5.79%   
5/1 ARM  5.74%  5.75%   
30 yr fixed jumbo mtg  6.33%  6.34%   
5/1 jumbo ARM  5.85%  5.88%
----------------------------------------------------------

The alternative which may be more attractive financially is refinancing your home completely. This is where the mortgage calculator can really work for you. There are a number of options when refinancing, especially if you have a substantial amount of equity in the home. By inputting these, one at a time, into a mortgage calculator you can create a list which will allow you to clearly see which option benefits you best.

Home equity loans often seem far more attractive to the home owner than they actually are. This is because the lender is hoping to seduce you into signing your property into his hands. Find out all the details and use your mortgage calculator. See if what you calculates matches what they want you to sign for. Later you may find that it wasn't such a good idea as your home suddenly becomes under threat of foreclosure because of some contractual obligation that you hadn't fully understood.

Only in extreme circumstances should you even consider a home equity loan that completely strips your property of any value over mortgage total. Keep your payments affordable by using the mortgage calculator and always factor in an additional percent or two on the interest rate.

Refinancing your home is a major step, but as with a first mortgage this is the only claim on your property. If you take out a home equity loan instead, then you will have an additional lender who has a financial stake in your home. If you decide that you much prefer the terms on the home equity loan, and the mortgage calculator seems to bring it well within your budget, then make sure you read the small print carefully.

You need to know what the payments are for: are they just interest which will leave a large capital balance payable at a later date, for example? Make sure you can afford these additional monthly payments.

Here are a few don'ts that will help you in the long run: