Rehoboth Beach Real Estate Blog - Mortgages & Credit Scores

Will You Need Private Mortgage Insurance on Your Rehoboth Beach Home Loan

Have you heard the term Private Mortgage Insurance (PMI) when looking to finance real estate in Rehoboth Beach or elsewhere? You may be wondering what PMI is and how you know when you need to purchase it. These answers can be hard to find among all the real estate jargon you might be hearing lately. 

Below is the short version of what you need to know. 

What is Private Mortgage Insurance?

Private Mortgage Insurance is an insurance premium required by some lenders to offset the risk of a borrower defaulting on their home loan. When you put down less than 20 percent of the real estate's purchase price, the lender will generally require that PMI is added to the loan. It is usually added into the monthly mortgage payment until the equity position in the…

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FHA: More Expensive Than Expected

The 3.5% down payment on FHA loans could be more expensive for buyers than expected. Beginning April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35% which may not even be noticeable to most would-be homeowners.

The staggering increase will occur on 6/3/2013 when FHA’s policy on the duration of the required mortgage insurance will be increased for the life of the mortgage. It basically doubles the amount of total MIP if the loan is paid to term.

Below is an example with a purchase price of $175,000 with 3.5% down payment at 4% mortgage rate on 30 year term.

Regarding the current MIP duration: When the unpaid balance reaches 78% LTV of original purchase, the MIP can be released. In any event though, the minimum time must be five…

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It’s Ba-aaack: Return of the 100% Mortgage

Some of Coastal Delaware’s wealthiest buyers may be getting a mortgage without putting a single dollar down. And we aren’t talking about single-bedroom fixer-uppers, either! 

It's called 100% financing, and, at first blush, it looks suspiciously like a version of the strategy that sent the economy reeling in 2008.  But lenders feel that well-heeled Rehoboth Beach residents who are getting a mortgage through these programs are totally different.  How so? you may ask. 

For openers, these loans are offered only to the super-qualified: those with serious investment portfolios they can use as collateral. That means getting a mortgage with zero cash for the down payment. That can carry an additional tax benefit, since the borrower won't have to pay a…

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Clever Tips for Paying Off Your Home Mortgage Faster

Paying off the mortgage on your Coastal Delaware home faster not only means that you’ll be able to enjoy the peace of mind that comes with completely owning your property earlier, but you may also save thousands of dollars in interest payments.

Below are seven clever tips to help you get your mortgage payments on the fast track.

1. Save for a large down payment

Pay as large a down payment as you can reasonably afford. The more you can put down, then the less you’ll have to borrow from the bank.

2. Read the fine print

When you are choosing a mortgage, look at the fine print to find out if any restrictions apply to paying early. Some lenders will charge you for making extra or early payments. 

3. Prepay early in the life of the mortgage

This…

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Bankers Are People, Too -- People With Rules!

Sometimes, even after your mortgage application has been approved, you have to scratch your head at apparent non-sequiturs that attach to the process (for instance, when a loan is made contingent upon your repaying an ultra-low-interest credit account).

Even more so if your perfectly dandy financial situation results in a turndown. How could this happen? The answer usually makes perfect sense…but only if you understand that bankers and mortgage brokers are bound by policies and procedures that apply to everyone currently buying homes in Rehoboth Beach. Knowing the rules ahead of time can influence how readily mortgage applications are approved. Some guidelines:

Forget adding "mattress money." 

Your bank account gets a thorough going-over, of…

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When Can You Buy Real Estate After Foreclosure?

If you lost your Lewes Beach home due to foreclosure, you probably haven't given up on the dream of owning a new home. The good news is that a number of guidelines have changed which may allow  you an opportunity to buy that new home sooner than you think.  

There are a few guidelines that lenders follow to determine when you’ll qualify for financing after foreclosure. Arming yourself with this information may help you qualify again for a mortgage.

Foreclosure With Extenuating Circumstances

Generally, lenders will take into consideration any extenuating circumstances surrounding the foreclosure on your Delaware real estate. 

Was there a death or illness that prevented you from earning money to pay your mortgage? Did you have a job transfer that…

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Breaking Down The Federal Reserve Statement (January 2013 Edition)

The Federal Reserve's Federal Open Market Committee (FOMC) voted to maintain the Federal Funds Rate within its current range of zero to 0.25 percent, and to continue its current stimulus program of purchasing $85 billion monthly in Treasury bonds and mortgage-backed securities (MBS).

Citing weather-related events such as Hurricane Sandy and drought in the Midwest, the committee said in its statement that information received since its December 2012 meeting "suggests that growth in economic activity has paused in recent months in large part because of weather-related disruptions and other transitory factors."

Concerns over the then-looming fiscal cliff crisis may have also contributed to the economic contraction during the last quarter of 2012.…

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What It Took To Get A Mortgage In 2012 [INFOGRAPHIC]

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Will 20% Soon Be the Minimum Down Payment on a Home?

Several government agencies are reviewing data to determine what will be the minimum down payment required under the new Qualified Residential Mortgage (QRM) guidelines scheduled to be revealed in the next few months. In the original Mortgage Market Note issued by the FHFA, it was suggested that loan-to-value (the percentage of the overall purchase price which was being borrowed) was a major factor in determining if a loan would default:

"For most origination years, requirements for borrower credit score and loan-to-value ratio are the factors that most reduce the ever-90-day delinquency rate of mortgages acquired by the Enterprises that would have met the proposed QRM standards."

The note then made the following proposal:

"An LTV ratio…

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Improving Your Credit Score Helps You Get Better Mortgage Rates

For home buyers in Coastal Delaware and nationwide, credit scores can change low mortgage rates and alter home loan approvals. Borrowers with high credit scores get access to lower mortgage rates, for example, and can find the mortgage approval process to be more smooth that borrowers with low credit scores.

If your credit score is low, here are some basic ways to help improve it. 

Get The Reports

Download an updated version of your credit report from each of the three major reporting bureaus -- Equifax, Experian and TransUnion. The reports may mirror each other, but credit accounts -- especially derogatory ones -- sometimes don't appear on all three. Ordering reports from all three bureaus is a safety step. Note that the credit bureaus each use…

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