Beware, Predatory Lending Still Alive and Well
October 9, 2011 by admin
Filed under mortgages, real estate info
Originally posted 2009-01-18 02:18:45. Republished by Blog Post Promoter
Recently, I attended a closing where the owner felt that the lender was performing predatory lending. I agreed, as a matter of a fact, I pointed it out. One of the signs of predatory lending in his deal was that the terms of the loan was not what the owner agreed to.
The owner immediately called the lender. From his demeanor, the lender was trying to convince him that the deal was the best the lender could do for his situation. This statement was met with the owner informing the lender that the owner’s present lender was offering a no closing cost deal, as well. After several more exchanges, the owner agreed to allow the lender time to meet the terms of the orginial agreement.Â
The lesson here is to read the documents you are signing. Do not take anyone’s word on what the documents state. When viewing documents look for the interest rate, term and cost for acquiring the loan. Question all items that you do not agree with.
The above scenario is one of many signs of predatory lending.
Other signs of predatory lending are:
- The lender tells the client that the product or loan the lender is offering is the only chance that the client has to get a loan or refinance. Remember if a lender does not give you a choice they are not the right lender for you.
- The lender states the home cost more than others in the area. Remember, the home can not be sold to you for more than what it appraises for. Futhermore, the appraisal is an opinion of value based on homes of similar, size, age, etc. as the property you are purchasing. Still yet, your Realtor can provide a comparative market analysis to let you know the value of the home.
- The lender ask you to sign a blank document. Never sign a blank document.
Lastly, if it seems to good to be true it often is. Read all documents that you sign and get second opinions by having your Realtor, attorney, and/or accountant review the rate, term, and contract before you sign to ensure your rights are protected.
Mortgage APR Made Simple
Originally posted 2010-01-18 05:00:04. Republished by Blog Post Promoter
- Image by mtsofan via Flickr
This post is written by Steven Parker. Steven Parker is a financial writer and contributor for the last five years. He specializes in mortgage and real estate industry and has written many articles on mortgage, reverse mortgage, loan modification, foreclosure and many more.
Mortgage APR represents the Annual Percentage Rate payable on a home loan. Potential homebuyers can use it for comparing various loan products. The Federal Truth in Lending Act (TILA) necessitates lenders to advertise this rate while marketing their loan products. The APR shows the overall cost of borrowing a loan and it is typically calculated on a yearly basis.
The Annual Percentage Rate essentially indicates the relationship between the overall amount that you’ve borrowed and the cost of acquiring the borrowed amount and it is expressed as a percentage.
Various lenders use various methods to work out the Annual Percentage Rate and hence, a precise comparison of loans by applying the APR is not possible all the time. Some lenders would use software programs to figure out the APR on the various loan products that they offer to the consumers. Because of this, some mortgage advisors might not even understand which fees are being taken into account for the calculations.
What is the goal of APR?
The principal purpose of the APR is to restrain lenders from publicizing unbelievably low interest rates and subsequently hiding additional costs for the mortgage to compensate the difference. Consumers who are looking for a loan must take into consideration the APRs of every loan they’re thinking about. If the Annual Percentage Rate on one mortgage is considerably higher than the Annual Percentage Rate on a same type of loan from another lender, then this is a signal that something is distinct like higher fees. Hence, a lower Annual Percentage Rate doesn’t essentially indicate a better loan.
Why APR is always higher than the interest rate?
As Annual Percentage Rate calculations take into consideration other extra costs related to the loan, the ultimate number is always higher than the interest rate applicable for the loan. Nevertheless, this doesn’t affect the monthly mortgage payment amount. The monthly mortgage payment is worked out only on the basis of the amount borrowed, the loan term and the interest rate.
While obtaining a loan, the borrower has to incur different fees. Most of the fees or charges are comprehensively uniform. Furthermore, the lender has control on particular fees and no control on some fees that are generated externally. Some fees are normally included in the calculation of APR, some fees are seldom included and some fees are not at all included.
What are the fees that are typically included?
The fees that are typically included in the Annual Percentage Rate calculation are the following:
- Underwriting fee
- Loan processing fee
- Document preparation fee
- Private mortgage insurance (if applicable)
- Origination points
- Prepaid interest (Discount points)
What are the fees that are seldom included?
The following fees are seldom included in the calculation:
<>Loan application fee
<>Credit life insurance expenses
What are the fees that are not included?
Given below are the fees that are not included in the calculation:
- Notary fee
- Escrow fee
- Appraisal fee
- Attorney fee
- Recording fee
- Transfer taxes
- Title fee
- Home inspection costs
- Credit report fee
- Document preparation fees
The Annual Percentage Rate is a helpful loan comparison tool. You shouldn’t forget to take this number into account along with the interest rates applicable for the loans that you are thinking about.
Related articles about credit and APR
- Simple Real Estate Definitions :APR (movephilly.blogspot.com)
- Your Credit and the Home Equity Line of Credit (taylorbrownrealestatetalks.com)
- Mortgage – Latest News (taylorbrownrealestatetalks.com)
- Record year for foreclosures as unemployment rises (seattletimes.nwsource.com)
- Find the Right Credit Card Based on Your Needs and Habits [Credit Card] (lifehacker.com)
Credit – Latest News
December 22, 2009 by admin
Filed under real estate
- Image via Wikipedia
Latest news about credit from around the blogosphere:
The Credit Crisis is Not Over :: The Market Oracle :: Financial …
The Credit Crisis is Not Over :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website.
CreditBloggers: Possible Cause of Credit Limit Reductions or …
Why did the credit card issuer do this to me? This is certainly one of most common questions we’re getting these days as credit card issuers are continuing to lower credit limits, close accounts, and increase interest rates. While many.
Banks’ Exposure to Derivatives Credit Falls in Q309 : HousingWire …
Derivatives activity in the US banking system continues to be dominated by a few large institutions, but credit risk in bank trading activities fell again in Q309, according to a report by the Office of the Comptroller of the Currency …
Related articles on credit
- Newest credit card trick? 79.9 percent interest (msnbc.msn.com)
- Is There Any Consumer Protection Issue Blue Dogs Support? (firedoglake.com)
- Consumers Turn to Bad Credit Loans to Help Ease Pain (prweb.com)
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It Is A Good Time to Refinance
February 16, 2009 by admin
Filed under mortgages, News, real estate info
Good News in This Economy
According to CNNMoney.com’s article http://moneyfeatures.blogs.money.cnn.com/2009/02/13/how-to-score-a-low-rate-loan/ it is a great time to refinance. With the falling interest rate, you can save thousands on your mortgage.Â
Caution on Your Refinance
The article goes on to caution the consumer that because everyone is trying to refinance at the lower rate it may take a lot longer to secure the lower rate because it is taking longer to close deals. However, Amerisave offers $1000 to the consumer if the loan does not close when promise. In addition, Amerisave offer the lowest rate and fees guarantee or Amerisave will pay you $500.
Taylor-Brown’s Year End Interest Rate Review
January 5, 2009 by admin
Filed under mortgages, News, real estate, real estate info
January 2008 5.75%
February 2008 6.125%
March 2008 5.75%
April 2008 6.125%
May 2008 6.125%
June 2008 6.375%
July 2008 6.5%
August 2008 6.4%
September 2008 5.93%
October 2008 6.46%
November 2008 6.04%
December 5.53%
Whether the interest rate is from January to December or December to January, there is no denying it has been a turbulent year. Let’s examine the turbulence.
In February, the interest rate surged and it may have been due to the economic stimulus package.
In March, though, there was a sudden drop in the interest rate. It may be due to the turbulent on the political front. With President Elect Obama, then Candidate Obama explains his continued relationship with conversational Reverend Wright; to Candidate John McCain winning his nomination; to Secretary of Defense, then Candidate Hillary Clinton defending her claim that she was under sniper fire when she served as first lady. Turbulent was turning into turmoil.
The month of March was topped by April revealing a new high to the interest rate that remained throughout May. Further, April brought gasoline prices reaching an all time high of $4.00 a gallon. Still yet, May reveal more disturbing news with Iran being found making active warheads.
June was another month the interest rates increased. It may have been triggered by more the dismal news from Chrysler of a plan layoff of employees. The month did have one bright moment when the nominatee for the Democratic ticket was final decided.
Another month of increased interest rates occurred in July. With headline news being Nominatee Obama being named chancellor for German and France surrending and Nominatee John McCain asking aides for assistance in picking running mate.
August was another month of converse with Nominatee Obama picking his running mate as Joe Biden. Nominatee John McCain chooses his running mate, Sarah Palin.
September was plagued with environmental woes with Hurricane Gustav and the Republican Party trying to keep the tragic of lack or little aid of Hurricane Katrina from becoming a reality again.
October reveal another attempt to stimulation the economy with the signing of the Emergency Stabilization Act of 2008. As a result of this failed attempt, the political platforms for both candidates became about the economy and “Joe the Plumber” was the headliner.Â
In November, Candidate Obama becomes the first African American president of the United States. The news of his victory did not stop the stock market from plummeting with the Big Three announcing their need for assistance to keep them from suffering the same fate as the mortgage companies.
December 2008 came in with the declaration of the US being in a recession and it also brought the discerning news of being in that recession since December 2007.
The turbulence of 2008 is just that for the year 2008, 2009 we have a President elect that wants to bring “change” and I think that American is going to embrace that with open arms.
