July 16th, 2010
Friday Scoop on Credit Karma & Housing Market News
The housing market takes a big hit as mortgage applications plunged last week to the lowest level in more than 13 years. New home sales also plummeted to a record low in May, another sign of the housing market weakening without the crutch of the homebuyer tax credit.
It’s no doubt that the housing recovery is beginning to stall since the tax credit expired in April. Check out more information on the state of the housing recovery at CNN Money.
If you are contemplating homeownership or want to improve your current home situation, the following roundup has a wealth of knowledge to make sure you stay ahead in this struggling housing market. Have a great weekend everybody!
July 9th, 2010
Friday Scoop on Credit Karma & Housing Market News
Think money can buy you happiness? Apparently, not in small doses. A study in SmartMoney reveals that after basic needs are met, the amount of additional happiness gleaned from every extra dollar gets smaller and smaller.
Find out more, plus get a dose of housing market updates.
July 2nd, 2010
Friday Scoop on Credit Karma & Housing Market News
Happy July 4th weekend! While you’re headed out to barbecues and local fireworks shows, make sure to keep your finances in check too. Kick off the holiday weekend with some Money tips from the Founding Fathers. Here’s smart insight on getting rich quick: “Few men have virtue to withstand the highest bidder,” said George Washington.
July 4th is also prime holiday time to cash in on money-saving offers! MainStreet lists some great 4th of July Deals and Steals you can find at a local store or restaurant near you.
The rest of today’s roundup has great advice and news on the housing market front, especially focused on saving $$ on your mortgage. Happy reading and enjoy this long, leisurely weekend!
April 23rd, 2010
Friday Scoop on Credit Karma & Housing Market News
Housing market recovery suddenly hit light speed as recent news reports show new home sales improved last March at the fastest single-month rate in 47 years. After four months of declining rates, the new-home sales spiked in every region of the U.S. and rose 26.9% nationally, the biggest percentage gain on a month-over-month basis since a 31% gain in March 1963.
Homebuyers are buying properties hot off the market as the Spring season usually signals a boost in home sales, plus consumers are buying ahead of the home buyer tax credit set to expire April 30. While a precarious job market threatens the housing market, firming house prices and hopeful employment will make economic recovery felt amongst consumers.
Get your housing market updates with the roundup below, plus tips specifically for renters!
February 17th, 2010
Refinancing: 3 Simple Questions To Ask Yourself
Refinancing may be the a great financial move to make if it reduces your current interest rate, enables you to cash out some equity in your home, or offers a more stable payment schedule with a fixed loan. Refinancing can be a tricky decision as the benefits often come with unexpected fees and costly hassle.
If you are considering refinancing your home, evaluate whether you stand to reap benefits or if you’re better off sticking with your current mortgage by asking these 3 simple questions:
January 5th, 2010
Dear Credit Karma – All About Auto Loans
Dear Credit Karma,
I was recently divorced and my ex-husband has an auto loan and my name is still on the debt, how do I go about that debt NOT affecting my credit score anymore?
The only way to remove yourself as a co-signer on this loan is for your husband to refinance the car under his name alone. This new loan will replace the old loan and you will no longer be liable as a co-signer. But in the meantime, any actions– including default or missed payments– taken on the account by you or your ex-husband will damage both of your credit scores. The debt will remain on your credit report as long as you are a co-signer, so have him refinance the loan as soon as possible to protect your credit score.
Dear Credit Karma,
My husband and I share a car – I really need to get my own, but we filed for bankruptcy a year and a half ago. I have poor credit because of that (and struggle with making payments on time). How likely am I to get an auto loan?
While bankruptcy is a tough financial pitfall to recover from, take heart: it won’t haunt your credit forever, and you can get an auto loan, but at a steep cost. If you are set on buying a car now, you will likely resort to a subprime or high risk lender, who cater to borrowers with poor credit, who will likely approve your loan. The real question is not “how likely are you to get an auto loan?”, but “can afford the exorbitantly high interest rate those types of lenders typically charge?”. Check out difference in payments between a poor credit and good credit borrower for a $25,000 loan on a 48-month payment plan:
|
Credit Score
|
Interest Rate
|
Monthly Payment
|
|
|
Poor Credit Borrower
|
620-659
|
13.2%
|
$673.17
|
|
Good Credit Borrower
|
720-850
|
5.7%
|
$583.69
|
*interest rates from Five Cent Nickel
That’s a difference of about $89 a month, which adds up to $4,295 difference in payments over the life of the loan. To see what kind of interest rate you’ll be offered and if you can afford it, look up your credit score and compare it to Five Cent Nickel’s auto loan interest rates.
The lesson here is that while you might need the car right now, the extra cost in interest rates over time may be reason enough to hold off on purchasing a car until you have better credit. Tacking an extra car loan payment may worsen your credit and overwhelm you with debt, especially if you are already struggling to make payments on time. Consider alternatives like carpooling, public transportation, or a system of sharing the car with your husband. In the meantime, take the next few months to improve your credit score with healthy credit habits like making on-time payments, using a secured card, and using the money you would have used on a new car to pay off existing debts. Within a year or so, you will have a higher credit score and be able to receive better financing options from lenders.
Submit a question now, and maybe Credit Karma will answer your question on our next Q & A blog post!
December 9th, 2009
Mortgage Applications Rise As Housing Inventory Decreases
The recent low rates have sparked additional interest in financing as mortgage applications rose 8.5% last week. Housing inventory declined in 27 major metropolitan areas at the end of November. More mortgage applications suggests increasing demand for homes, and less homes listed for sale indicates less supply. If sustained, these two combined forces of demand up and supply down, coupled with the incentive of the homebuyer tax credit, could spark recovery in the housing sector.
The decline in housing inventory across major metropolitan areas is more pronounced than in years past, reports real-estate brokerage firm ZipRealty Inc, going down an average 2.4% compared to the average change of 1.8% in the past 25 years. Major urban centers like Orange County in California, the San Francisco Bay Area, Washington D.C, Chicago, and Austin all showed a 2-8% decline in inventory.
These numbers indicate that fewer homes on the market may spur homebuyer demand, with the help of the extension of the federal homebuyer incentive that knocks off $8,000 off a home’s price tag for some new homebuyers, and $6,500 for existing homeowners looking to purchase a new home. However, analysts warn that with the current number of households behind on mortgage payments or in the foreclosure process, a large number of homes are expected to saturate the market early in the new year.
However, there are also signs of homebuyers on the hunt. Applications for home loans surged 8.5% while applications for home purchases were up 4%, both on a seasonally adjusted basis. Refinance applications rose to an unadjusted 11.1% due to mortgage rates that have lingered below 5%, near-record low territory . Currently, 30 year fixed mortgage rate is 4.97% 15 year fixed mortgage rate is 4.55%, and 5/1 ARM is at 4.15%, reports Bankrate.com.
Significant change is expected in 2010, when the Federal Reserve is scheduled to end its purchase of mortgage-backed securities that has kept rates low for much of 2009 as well as the federal homebuyer’s tax credit expiring on April 30. Many consumers may be waiting for signs of a stronger market before selling their home or buying a new one, which may also increase housing inventory next year. Keep up with our Friday round-up for the latest housing market news, advice, and mortgage rate updates.
At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!
October 14th, 2009
Mortgage Rates Dip Below 5%
National mortgage rates dropped below 5 percent last week, spurring homeowners to get up out of their recliners and interested in cutting their monthly mortgage payments, all leading to a recent boost in refinancing applications. A combination of the government’s $8,000 tax credit, the FHA’s Streamline loan program, high affordability, and this encouraging dip below 5 percent in mortgage rates is paving the way for much-needed stabilization in the U.S’s shaky housing market.
When the average rate on 30-year mortgage loans dipped to 4.89 percent, refinancing applications suddenly resurfaced last week with more oomph than we’ve seen in some time. Reuters reports that refinance demand went up 38 percent shortly after the rates dropped. Mortgage brokers advise that refinancing is a good option for homeowners if it will shave off at least $100 from your monthly mortgage payment or can get a full percentage-point rate reduction.
That seems to be the case for many homeowners since the recent drop in mortgage rates spurred some borrowers, who had already refinanced in the last 18 months, to double-dip refinance to save even more money.
This is the second time this year rates have hit below 5 percent, besides this spring’s record low of 4.78 percent. With the large volume of unsold homes sitting on the market, these record low interest rates, and the federal tax credit and home loan programs all coming together in this favorable time, it’s shaping up to be a great environment to consider purchasing your dream home now.
Keep track with us as we continue to monitor mortgage rates , cross our fingers, and hope for more encouraging signs for our economy.
March 19th, 2009
Weekly Mortgage Roundup March 19
Mortgage rates fell this week, with the 30 Year fixed dropping to 4.98% from 5.03%. This is lowest level this year, and has the potential to drop even further with the Federal Reserve’s ongoing efforts to revive the housing market. They 15 Year fixed dropped to 4.61%, down from 4.64 from the week before. The 5 Year adjustable rate mortgage fell slightly from 4.99% to 4.98%. These rates also include an average of .7 points. These rate quotes were given before the Fed announced they were injecting $1.2 trillion into the economy by purchasing treasury bonds and other US debt.
I had stated earlier that I doubted mortgage rates would drop to 4.5% on a 30 Year fixed, and I cautiously still believe that rates won’t go that low. Lenders have not been quick to drastically lower their rates and are still dealing with the challenges of operating in today’s environment. These companies laid-off significant portions of their staff and are running a skeleton crew. In January of this year, rates fell significantly and mortgage applications flooded the lenders’ offices. What did they do? Lenders raised rates to discourage additional applications which allowed their staff to catch up on the backlog.
So yes, the mortgage rates may drop this week, but I don’t expect that to carry on for very long. If you are in a position to refinance your adjustable rate mortgage, you will need to get your paperwork going as quickly as possible to take advantage of these latest rate drops and lock your rate, but beware, they could disappear quickly.
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March 10th, 2009
Ready to Refinance?
With Obama’s new Making Home Affordable Plan recently released, its time for another post about refinancing and how to make the process as painless as possible. Lenders are more apt to reduce your interest rate now that there is federal money backing them up. If you have already tried to refinance before and have not been successful, it might be time to try again. First, you should make sure that you fit within certain criteria in order to qualify:
- Mortgage is Fannie/Freddie approved. No loans over $729,500
- Mortgage was signed before January 1, 2009
- You live in the property
- Have full documentation of your income and assets. 2 paystubs and 2 years tax returns (you will have to sign a 4506-T form)
- Have a financial hardship and can sign a legal document attesting to this
Once you meet these requirements, I would next try to obtain the real market value of your property. You can use sites like Zip Realty, or Zillow, to give you an approximation of your home value. This new program has a cap of 105% on the Loan to Value (LTV), which means that you can refinance up to 105% of what your home is currently valued. You should make sure that you are not over this ratio or at least very close to it before you proceed.
In years past, if you were in the market to refinance, you could go back to your lender, shop around by calling banks and other mortgage companies for the best rate, or use a mortgage broker to do that shopping for you. In today’s environment, going back to your lender has the most benefits. Your current mortgage company already has you on their books, is aware of your payment history, and is also more likely to offer you a better deal so they can maintain their operations. Your lender has the most to lose and gain by refinancing your mortgage. I strongly suggest that you speak with your current lender before exploring other options.
Once you speak with your lender, explain to them the situation as truthfully and unbiased as possible. Depending on your credit score, house value, amount owed, other debts, and current income, your lender will be able to determine how much they can reduce or rate. The days of stated loans are over and it will make the process smoother if you are truthful about your situation and how you got there. You are going to have to prove that you make what you say, or what you have in the bank, so there is no need to try to dupe your lender. Remember, these lenders are now being compensated for each loan they adjust under this new modification program. They want to help you. Not to say that they will ALWAYS be able to help you, but it’s worth the shot.
Does anyone out there have any recent experiences to share regarding refinancing now that the new bailout guidelines have been launched?
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