Your Questions About Home Loan Rates

Mark asks…

What is a loan modification and do you have to be behind on payments to get one?

I am facing some hardships by have managed to keep everything current. I am looking at contacting WAMU who owns my home loan and asking for a lower rate, but I am current on everything and wonder if I would just be wasting my time.

John answers:

Some lenders will not take loan modification application if you are current on your mortgage. If you have right now arm rate your changes are better to do this without late payment on your mortgage. Call them up and explain your situation – cost nothing to try.

Helen asks…

What are the average yearly bank fees for a home loan of $323,000?

I’m doing a maths assignment, and the average yearly bank fees on a mortgage (preferably as a percentage of the total loan) would be really helpful.

Also, what are the average up-front costs associated with a home loan? If they are based on the size of the loan, what are they as a percentage of the total home loan?


John answers:

There are many different types of home loans available and the fees and establishment fees depend on many factors. So, do your research with the various bank online.
Too many factors to give you a difinitive answer here.
Loans can be stand alone or packaged with other products, reducing fees and interest rates.
Just as a quick guide – set up fees around $600 include valuation
Monthly ongoing fee $10
But far too general a question, given the competiveness of banks to acquire home lending business – often no application fees and discounted interest rates available.

Donna asks…

Can cosigning for friends college loan impact personal credit rating or score?

I am trying to buy a house however my friend needs me to sponsor her college loan. If I signup to be her cosigner, would that directly or indirectly impact my creadit rating or score? I would like to help my friends but afraid of not qualifing for home loan or better interest rate

John answers:

Hello — don’t help your friends. They cannot get a loan cause they do not pay their creditors. If you CO on a loan it will definately affect your ability to get a home loan. Earnings to debt ratio … If she defaults on the student loan then you have to pay it off–Thats right you– I get the feeling that you are being set up to get stuck for a student loan by a pretty lady. Don’t be so gullable… ABSOLUTELY DO NOT SIGN ANY PAPER TO COSIGN ON A STUDENT LOAN — CAR LOAN –OR ANY KIND OF LOAN.
YOU WILL PAY WHEN THE PAYMENTS ARE MISSED—IT IS THE LAW. Techanically it is your loan and you gave her the money.
You loan her the money on an installment agreement and when she does not pay — go to small claim court and recover some of this money.

Laura asks…

Is it more advisable to take home loans at fixed rate or floating rate ?

John answers:

When applying for a home loan, opting for interest rates is a cause of dilemma. Should one opt for ‘floating’ or ‘fixed’ rates of interest?

Interest rates have been fluctuating since the last 6 years, so much so that the consumer is not sure of the future.

In March 2000, the floating interest rates on home loans were about 14 per cent; later they started falling quite steeply. By the last quarter of 2003, the interest rate (floating) on home loans fell to 7 per cent.

Again in January 2007, the loan interest waves have surged to a high of around 10.5 per cent (floating rate of interest). This hike is dramatic considering that it is a jump of 3.5 per cent since the historic low of 7 per cent reached in 2003.

This uncertainty has once again raised the million-dollar question. What should a home loan consumer do? Should s/he go in for a floating rate home loan?

Have a look at the following link which will answer lot of your queries..

Carol asks…

home loan 95% financing?

I need some recommendations for a home loan.
My husband has a credit score above 600 and mine also.
he works I don’t.
The only problem is he ows about 16,000 on delinquent credit
card payments from college.
He was offered a loan with 10% down, that would be about 10,000
to 16,000.
Too much for us right now.
We want to put down about $5000 plus closeing cost and then just make payments.
We are in Mo area does anyone know of a good lender for this situation?
He has a good work history and college graduate with a good income around 60,000 yearly

John answers:

Home loans are now available to many people for whom they would have been out of the question just a few years ago. You’d be in much better shape to bargain for better interest rates if you had a more impressive credit history, but if the house you want is the deal youinterest rates, get bigger returns on the money loaned, and the borrowers get a homes in which to build equity, and chances to restore their credit records so that the first bad credit home loans they take will also be the last!

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