Home >> News >> LoanBlog >> September 2009

Should You Pay Points on a Mortgage Loan?

September 23rd, 2009

Current mortgage rates have declined to an average of about 5% for a 30-year mortgage, pushing some homeowners to refinance or apply for a new home loan. If you have a good credit score you’ll likely qualify for the best mortgage rates. But even if you don’t have that great of a score you can pay points on a loan to lower your mortgage costs.

What Are Points?

Each point equals 1% of the amount of your mortgage. So for a $250,000 mortgage  a point would be equal to $2,500. Depending upon the loan, you could choose to pay several points. How many points you pay usually depends upon things like how much of a down payment you have. Read the rest of this entry »

High Credit Scores Linked to Strategic Defaults on Mortgages

September 21st, 2009

People with higher credit scores are more likely to strategically default on their mortgage loans, according to research by credit bureau Experian and consulting firm Oliver Wyman. After reviewing 24 million credit files, researchers found that homeowners who had high credit scores when they applied for a mortgage were 50% more likely to intentionally walk away from their homes and stop paying on mortgage loans than borrowers with lower scores.

Walking Away from Home Loans

As housing values have plummeted in some areas, an increasing number of homeowners have decided to bail on their mortgages, allowing their homes to go into foreclosure. That’s because many of these people are unwilling to continue paying on a home loan that exceeds the value of their property. In 2008, there were 588,000 strategic mortgage defaults, more than double the number in 2007. Read the rest of this entry »

Getting a Mortgage? Don’t Miss out on the First-Time Homebuyer Tax Credit

September 8th, 2009

You still have time to take advantage of the first-time homebuyer tax credit of up to $,8000. To receive the credit you must close on a home mortgage by midnight of November 30. If you’re planning to buy a home before the end of the year, here is what you need to know to keep from missing out on the federal tax credit.

Closing on a Mortgage Loan

The tax credit is for 10% (up to $8,000) of the purchase price of a home that costs $80,000 or more. You can only use the credit toward the purchase of a principal residence, so vacation homes and investment property don’t qualify. However, you can file for the credit if you owned a principal residence outside the U.S. during the previous three years. Read the rest of this entry »