Your Questions About Mortgage Loan Rates

Laura asks…

What is the average life of a mortgage loan?

Does anyone know where I might find any research or articles on what the average life of a mortgage loans is? I have heard various estimates for 30-year fixed and 15-year fixed, and would like some actual evidence to support the average life of a loan. I’ve seen the asset pricing tables prepared by the Comptroller of the Currency, but those reports ended in 2011, so I’d like to see a link to something more current, just can’t find anything. Thanks.

John answers:

The weighted average life (“WAL”) of a mortgage is the average time until principal is repaid. It is also the average amount of time that the principal is outstanding. Recall that for a standard fixed-rate mortgage with level payments, the principal component of each monthly payment is different. We assume for now that all payments will be made as scheduled.

The usual way to find the WAL of a mortgage is to build an amortization schedule, multiply each principal payment by the corresponding month number, take the total of these products, and then divide by the total principal amount. For a 30-year mortgage, this would involve 360 rows of monthly calculations. But there is a much easier way.

Susan asks…

Is an annuity refundable against a reverse mortgage loan if the borrower dies before annuity payments are made?

My Mother had a reverse mortgage loan for about nine years. At the start of the loan ,an annuity premium of $3735.00 was added to the to the loan. This was to pay her if she lived 14 years into the loan.,but she did not . Should that amount be deducted from the total amount of her loan?

John answers:

Wow, this is how is always look like when getting a loan. They ask you to make a high interst rate repayment plains that you can not pay, making it very hard for you to pay. Trust me i have been in the position before and i know how it look like, i will only ask you if really you are in need of the loan and how seroius are you in paying back that is what you have to consider. Well i got help from a friend here in yahoo answer whom introduce me to and i applied witing 6 days i was giveen a loan and i am making the payment now i got a loan from Unsecured company at the rate of 3% which was ok for me now well with God i am doing perfectly ok with my part time business. Well as of you i will advice you to try them and get a loan for easy help, make sure you are good in repayment.

Dan J

Donald asks…

What is the highest your credit score needs to be to get a mortgage loan?

I have been trying to get my credit straightened out for a month now and I was wondering how close I may be to actually getting a mortgage loan.

John answers:

The higher the better. Interest rates are lower for people with really good credit.

Joseph asks…

Mortgage Finance Experts: How will the market affect homeowners who will be refinancing next year?

My parents bought their home 4 years ago at a 4% rate, which is due to change next year when their loan rate. With the market crunch and the new strict lending that’s bound to occur as a result of this, they are worried about what refinancing has in store for them. The good news is that they have flawless credit (they successfully removed their PMI, and they are early every month on their mortgage payments —and they pay an extra couple of hundred dollars than they should. Not to mention their credit card debt is very low (only a couple of thousand dollars). They’ve both been at their great paying jobs for over a decade; but they are still worried about whether they will be able to secure a decent fixed rate when their mandatory refinance is up. Any hope?

John answers:

The biggest impact on our market is the following:

1. – There is no longer any subprime lending
2. – Jumbo loan rates have been rising disproportionate to the rest of the market
3. – The ALT-A market has all but vanished
4. – FHA Loans have become increasingly attractive.
5. – Fannie Mae loans have for the most part remained unaffected.

While I certainly cannot predict what the market will be like a year from now (if I could I wouldn’t be writing loans and training loan officers for a living) I don’t see subprime on the radar for quite some time. Everything else will come around and normalize.

Here’s a point that everyone seems to be missing. For the most part this is a market problem – Given time the market will correct the problem. Not the Senate.

Daniel asks…

Why is it that there is a goverment sponsored program that enable illegal aliens to own a home?

Opportunity I-Loan, a housing pilot program launched by the state of Illinois help illegal aliens secure a mortgage loan below market interest rate. The program was initiated last year by Governor Rod Blagojevich.

And you are worried about your FICO score?

The illegal aliens stole your “american dream” right under your feet.

John answers:

Doesnt surprise me…politicians pandering for votes again and forgetting about who elected them in to office in the first place

politicians who give our tax dollars away to illegal aliens and sell our state services to companies that hire illegals and dont give them medical should be hung from street poles…. After they have rescinded their unamerican laws

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