Oxstones Investment Club™Buying more house than you can afford is so 2006, right? Maybe not.
While some mortgage products that proved problematic in the lead up to the housing bust aren’t widely available anymore (think piggyback loans and interest-only adjustable-rate mortgages), low down payment mortgages are still around for the taking, including those backed by the Federal Housing Administration. That, coupled with ultralow mortgage rates, is helping some Americans purchase a home even though prices have been on the rise. But it may also be leading some buyers to become overleveraged, said Sam Khater, deputy chief economist for CoreLogic, a financial data provider.
“We are not quite at the same leverage as during the peak of the boom in 2006, but we are not far from it,” Khater said. The average down payment was 13% in July, according to CoreLogic data, still above the 12% low in November 2006, December 2006 and February 2007. But over the past few years, the average down payment has slid in a fashion reminiscent of 2002 through 2006, he said.
Luckily, there is no shortage of online resources and apps to help prospective buyers think critically about how much mortgage they’d truly be comfortable with — regardless of what the bank may be willing to lend.
When looking, be specific about what kind of information you’re seeking (e.g. rates, refinancing, amortization) for the best advice, said Keith Gumbinger, vice president at mortgage information site HSH Associates.
Also, don’t enter any kind of personal information during your research phase, Gumbinger said. It’s likely that information gathered from some sites will be passed along to people eager to sell you a loan, so keep it to yourself, he said. And cast a wide net, reading as much as you can from as many different sources as possible.
Below are several good places to start.
Starting out
Freddie Mac’s My Home page helps consumers understand some basic mortgage concepts, directing users to content most applicable to them.
Other good places to start: the U.S. Department of Housing and Urban Development and the Consumer Financial Protection Bureau, which take visitors through the homebuying process step-by-step.
Some good information can also be found on the Homeownership Preservation Foundation’s 995home.org website; the name of the site comes from the independent nonprofit’s consumer hotline.
Calculators and apps
Once you understand the basics, begin thinking about how the information relates to your own finances. HSH has a large selection of tools, including affordability, private mortgage insurance and mortgage refinancing calculators, as well as an extensive mortgage glossary.
Many people like the simplicity and functionality of Karl Jeacle’s Mortgage Calculator, which can also be downloaded as an app. Another popular choice: Zillow’s mortgage calculator, which has an app to go with it as well. Bankrate is another good source for calculators and mortgage advice.
http://www.marketwatch.com/story/looking-to-buy-a-home-start-with-these-websites-and-apps-2016-10-31
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Credit history and scores
Early on in the process, mortgage shoppers should view their credit reports to make sure that there are no mistakes that could bring down their credit score — or if it’s worth taking some time to improve their credit history before getting a mortgage. This is one case where entering personal information is necessary in order to get your personal reports. A popular site to check the three credit bureaus — EquifaxEFX, -0.37% Experian EXPGF, +0.94% and TransUnion TRU, +0.59% — is AnnualCreditReport.com.
Some credit card companies provide your Fico score for free on your statements. The Fico score is a number based on your credit reports and is an indicator of your creditworthiness to lenders. If you don’t get your score for free — and you’d like to know where you stand before a lender pulls it for you — you might check out myFico.com, which will give you your score for a fee.
http://www.marketwatch.com/story/looking-to-buy-a-home-start-with-these-websites-and-apps-2016-10-31
Tags: Bankrate, Consumer Financial Protection Bureau, Federal Housing Administration, Freddie Mac, Homeownership Preservation Foundation, Karl Jeacle’s Mortgage Calculator, low down payment, mortgage products, U.S. Department of Housing and Urban Development, ultralow mortgage rates, Zillow’s mortgage calculator