Beware of the Hidden Prepayment Penalty!


Originally posted on Ask Carolyn Warren:

?????????????????? FHA loans — the first-time home buyer loans with only 3.5% down payment — have a hidden prepayment penalty that could cost you hundreds of dollars when you sell or refinance.

If you used an FHA loan (3.5% down payment) when you bought your house, get out the Truth-in-Lending form. Near the bottom, you’ll find in bold Prepayment Penalty. Is the box checked for may have or for will not have a prepayment penalty? Regardless of which box is checked, if you close your loan on any day of the month except for the last day, you will pay a penalty.

Question: “Can they do that? My documents says I will not have a prepayment penalty!”

Answer: Yes they can, and I guarantee you that they will. If you pay off your mortgage in the middle of the month, FHA will charge you interest for the entire month, no…

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Adjustable-Rate Mortgage Basics


Originally posted on Mortgage with Memories:

Residential Neighborhood

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages are those in which the interest rate is altered periodically during the life of the loan. For most ARMs, the rate is fixed initially, commonly for one, three or five years, and adjusts for the remaining years. ARMs require knowledge and attention on the part of the borrower.

Advantages

  • Monthly payments go down if interest rates fall
  • Falling interest rates reduce the overall cost of the loan
  • The starting rate charged by lenders is generally less than for FRMs, because the borrower assumes the risk of unfavorable changes in the money market

Disadvantages

  • Monthly payments may go up significantly, sometimes leading to default
  • Caps on the monthly amount to safeguard the borrower can result in payments lower than the amount due, so the outstanding balance increases every month
  • Making extra payments to principal does not shorten the term of the mortgage and is therefore less…

View original 23 more words

Adjustable-Rate Mortgage Basics


Originally posted on Mortgage with Memories:

Residential Neighborhood

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages are those in which the interest rate is altered periodically during the life of the loan. For most ARMs, the rate is fixed initially, commonly for one, three or five years, and adjusts for the remaining years. ARMs require knowledge and attention on the part of the borrower.

Advantages

  • Monthly payments go down if interest rates fall
  • Falling interest rates reduce the overall cost of the loan
  • The starting rate charged by lenders is generally less than for FRMs, because the borrower assumes the risk of unfavorable changes in the money market

Disadvantages

  • Monthly payments may go up significantly, sometimes leading to default
  • Caps on the monthly amount to safeguard the borrower can result in payments lower than the amount due, so the outstanding balance increases every month
  • Making extra payments to principal does not shorten the term of the mortgage and is therefore less…

View original 23 more words

NE Broadway & 11th, 1929


Originally posted on Vintage Portland:

Our Number Man finds himself on the sunny northwest corner of NE Broadway at 11th Avenue in this 1929 photo. This modern and tidy Standard Oil service station featured covered pumps on both sides of the sales booth plus covered service bays in the background.

A2009-009.3268 NE Broadway and 11th 1929(City of Portland Archives)

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No Relief Yet With Pending Sales


Originally posted on Populareconomicsblog:

The Mortgage Corner

We can’t yet count on Pending Home Sales, a predictor of closings in 60 to 90 days, to predict a boost to this year’s sales. They have been falling since last July, and the last spike in mortgage rates.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, dipped 0.8 percent to 93.9 from a downwardly revised 94.7 in January, and is 10.5 percent below February 2013 when it was 104.9. The February reading was the lowest since October 2011, when it was 92.2.

pending

Graph: Econoday

It could be the weather as NAR chief economist Lawrence Yun says, but there are still fewer homes on the market, and fewer being bought by all cash investors. Yun believes the recent slowdown in home sales may be behind us, while home prices continue to rise. “Contract signings for the past three months have been little…

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NE Union & Knott, 1929


Originally posted on Vintage Portland:

At first glance you’d think these two imposing homes on NE Union Avenue at Knott Street are long gone. Surprisingly, they both still stand today, as does the third home in the background. It appears both have had the elevated ground excavated and the basements removed so the first floors sit at street level today.

A2009-009.1053 NE Union & Knott 1929(City of Portland Archives)

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