A and N's Home Buyer Tips: Get the Best Refi Rates

• Improve Credit - If you're a homeowner with great credit and plenty of equity, odds are those lower rates are within your reach. But if your score is less than desirable, work at improving it by paying all of your bills on time, paying down your credit card debt, keeping your credit lines open and increasing your credit limits.        

• Loan-to-Value Factor - To calculate your loan-to-value ratio, divide the amount you want to borrow by the current value of your home. If your LTV ratio exceeds 80 percent, you may have trouble qualifying for a refi.

• Short Term = Savings - Paying your loan off in a shorter period of time is not only a surefire way to save money over the life of your loan, but it is also a way to obtain an attractive rate on your mortgage.

• Opt to Pay Points - Buy down your loan's interest by paying points. A point is equal to 1 percent of your loan amount. Those buyers who opt to pay more points when refinancing are often  able to acquire lower interest rates on their loan. This could mean significant savings over the life of the mortgage. 

Is Mortgage Fraud on the rise even with the new Fannie Mae requirements for QC?

While commercial loan origination and median home prices have been trending downwards, mortgage and property fraud rates have been steadily increasing, up 75% from pre-recession peaks. According to the CoreLogic Fraud Index, $12 billion worth of originated loans were found to be fraudulent in 2010, and while the total for this year is expected to be around $7.4 billion, the rate of mortgage fraud remains constant due to the currently contracting revenues of the mortgage business. 

In all, these fraudulent mortgages could carry a price tag of up to $375 million a year for lenders. However, also according to the CoreLogic Fraud Index, mortgage fraud has taken on a new identity, with the traditional identity and employment fraud rates falling a combined 56% from their 2010 levels. 

Current market conditions- distressed and depreciating properties, as well as overwhelmed loan servicers scrambling to mitigate growing losses following the mortgage bubble’s collapse in late 2008- have proven to be strong catalysts for the growth of property, occupancy, and debt fraud in a time when US regulators are watching the mortgage business more closely than ever. 

Further examination of CoreLogic’s data have also show higher fraud rates in the Midwest and Northeast, with Chicago receiving the top national ranking where the risk of mortgage fraud is over 30% of the national average. Furthermore, Suspicious Activity Reports filed by large lenders was 70,472 in 2010, up from 67,507 in 2009. However, it is important to note that while SAR reports are increasing, this increase may show a growing trend of due diligence and stricter compliance with mortgage laws following the housing bubble’s collapse in late 2008.

Stats cited from http://mortgagedaily.com

The Importance of Home Inspection

There are several reasons to inspect a home before purchasing.

• Safety -A home inspection can protect you, the buyer, from any safety issues like carbon monoxide, radon and mold, which is quite common in foreclosed and short sale properties.

• Option to Withdraw -Anyone who can recall a popular Tom Hanks flick, The Money Pit knows that a quality home inspection prior to purchase could save you thousands of dollars (not to mention your sanity). As soon as the deed is transferred, you no longer have the option to walk.

• Important Negotiating Tool -Not only does a home inspection report provide the buyer peace of mind, it also presents an opportunity for the buyer to request repairs, a price reduction, or even a credit from the seller.

• Forecast Future Costs -A home inspector can often times approximate the installation age of major systems and appliance in your home, such as the roof, heating, cooling and the water heater. Knowing the shelf life of certain systems and appliances can potentially save you thousands of dollars down the road.