Nenita Dasalla- Single Family Residence Real Estate Sales Consultant

Closing costs can increase the price of a home by as much as $10,000, sometimes more.  Borrowers who are “cash-poor” can ask for assistance, or talk to their lender about a lender credit toward closing costs.

Making sense of the story

• Some lenders advertise that if borrowers agree to accept a mortgage interest rate from a quarter to a full percentage point higher than they would ordinarily qualify for, they can receive credit toward their closing costs.
• These mortgages are sometimes called no-closing-cost loans, though the term is misleading.  The credit usually covers only fees charged by the mortgage broker or bank, like the loan origination fee, the underwriting expense, and the appraisal.  That generally leaves title insurance, mortgage-recording taxes, insurance, and escrowed taxes to cover.
• The amount of credit depends on total closing costs and other loan details.  Generally, for every one-eighth of a point increase in interest rate, borrowers receive a credit worth half a percentage point of the principal amount.
• While these mortgages can be helpful to some, borrowers should carefully review all the details.  There are pluses and minuses to these loan types.  A downside is the higher rate and monthly payments remain in place through the life of the loan.
• Doing a side-by-side comparison of loans with and without the credit can be helpful.

Read the full story
http://nyti.ms/svzEBM

Starting Oct. 1, Fannie Mae and Freddie Mac will cut the size of loans they buy from lenders.  That will force many future borrowers into more expensive and harder-to-get jumbo loans.

Read the full story
http://www.usatoday.com/money/economy/housing/story/2011-09-06/Coming-loan-changes-could-squeeze-high-priced-home-markets/50286952/1

Calif. median home price: July 2011: $294,230 (Source: C.A.R.)
Calif. highest median home price by region/county July  2011: Marin: $761,030 (Source: C.A.R.)
Calif. lowest median home price by region/county July 2011: Madera $92,500 (Source: C.A.R.)

Calif. Pending Home Sales Index: July 2011: 117, a decrease of 1.7 percent compared with prior month.
 
Calif. Traditional Housing Affordability Index: Second quarter 2011: 51 percent (Source: C.A.R.)

Mortgage rates: Week ending 8/18/2011 30-yr. fixed: 4.15 fees/points: 0.7% 15-yr. fixed: 3.36 fees/points: 0.6% 1-yr. adjustable: 2.86% Fees/points: 0.6% (Source: Freddie Mac)

Authorities have been seeing more mortgage elimination scams recently.  Con artists are targeting Latinos whose homes are in foreclosure, asking victims to pay a processing fee of $1,000 to $3,000.  The victims are told they can get a new mortgage for 25 percent of what their current mortgage is. The criminals file a new conveyance, claiming that the loan has been paid off.  Of course, the legal lender continues with its foreclosure proceedings and the borrower loses his or her home along with the fees.