 My wife's credit score is mid-700s, mine is high-600's, can we get a home loan? |
Additional Details
How do they choose which credit score to use? Experian, Equifax or TransUnion?... |
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With all the news on house prices at the moment, is it a bad idea to buy a house?
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California:
I was renting to someone who didn't regularly clean the house including the bathrooms and kitchen. One of the bathroom shower faucets began to drip but never told me. As a ... |
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 How does a mortgage work? |
OK, im looking at buying a house and though I have a vague understanding of what a mortgage is, its still pretty confusing. Can someone explain to me how it works, what i am paying, etc...
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 What are the steps in buying a property? |
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 How do I go about getting a loan to purchase a home? |
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 Im a 1st time buyer looking for a property in london. Budget is £200,000, where in can i get value 4 money? |
| Current seeking 2bed house/flat in london, this is a challenge being 1st time buyers but we desperately need to get onto the property ladder. Please can you advise what area within london or ... |
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 I am selling my house privately, do I need an attorney for the seller disclosure agreement or just closing? |
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kimmes | Why dont the Feds reduce the interest rates. And Cap the interest rates of people with bad credit.? |
The higher the rate the more likely people will lose there home, the more likely banks will close their doors and it is a domino reaction. If the Fed's would come in and regulate the Mortgage Broker Industry completely STOP PRE-PAY PENALTIES and cap the Interest rates of people who have had some bad luck at 2 points above A paper loans there would be a tremendous decrease in forclosures in the Mortgage Industry today. Less Realtors, Bankers, Builders and General Contractors would lose everything because the market went from so GREAT to Major Banks closing there doors overnight. I am a Mortgage Broker in NW Florida and I along with most everyone in this area is about to lose everything I have I can hardly buy groceries and pay bills and keep a roof over me and my kids head it is almost as bad as another Hurricane atleast then there would be some help. Come on someone step up lowere rates and ELIMINATE OPTION ARMS ot does not take a rocket scientist to figure out this would solve the pro |
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PlasticTrees
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I feel sorry for you, and you already know the bad news.. it will only get worse. As of Sept 1st FICO is fading authorized user's out of their calculations. Millions are going to be affected by this, credit scores will drop, even more people will be opting out of buying homes, the banks are going to raise their mortgage costs.. it just keeps going. |
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noslot777
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Because the current administration is against anything but the biggest of business and hates when any profit that could be made is lost. They will never get rid of prepayment penalties because the interest is how the business stays profitable. And any lowering of thew rates is a double-edged sword. It can be extremely beneficial to the banks or the consumers by doing exactly as you propose. But it could also turn and make it where everybody tries to refinance and then the long term money is so little that the lenders go under anyway. |
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Oh Boy!
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First, the Fed keeping interest rates as low as they did for as long as they did is what started the real estate bubble as well as the sub prime mortgage rush. The real Fed Funds rate (Fed Funds rate minus the 30-day T-Bill rate) was actually negative for nearly 2 years. Given that interest rates being too low started the problem, it seems that lowering them again isn't likely to solve the problem. That's like thinking that the best thing for an alcoholic going through the DT's is a shot of whiskey. May cure the immediate symptoms but just makes the problem and ultimate cure all the worse.
Second, capping interest rates is un-American and it won't work. Banks simply won't lend money if the return isn't worth their risk. Instead of responsible sub prime home owners starting small and smart and gradually moving up the credit chain, they'll be shut out forever.
Third, since when is the Fed responsible to Realtors, Bankers, Builders and General Contractors who had it so good for so long and over-extended themselves? Why would they ever show any credit discipline if they know the government will bail them out of their bad decisions?
Fourth, the vast majority of sub prime borrowers bought with very little or no money down, so while them losing their homes is certainly sad, it's not financially devastating because they never had any equity in their homes to lose.
Fifth, why didn't you put a little money aside when things were going so well? You'd be able to buy food now. |
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Casey C
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I agree with OH Boy and SeanS... I'm a mortgage banker in south florida and I'm doing just fine. Supposedly my market is worse than anyone's in the entire nation.
As for your rants, you need to stop blaming the market for your problems.
why would you cap the interest rates of people with bad credit? If you did that banks just wouldn't lend to those people anymore. It's all supply and demand brother. Personally I don't understand why people with bad credit even have a platform to stand on... pay your bills and have contingency set up in case you are struggling.
Stop Pre-pay penalties? How would you like to stick your neck our for someone with $100,000 of your own money that has bad credit and a relatively high potential of defaulting on your loan. Wouldn't you like to have the guarantee that you will get at least 2 or 3 years worth of interest before they pay it off? Even at 8 or 9%, the lender is only getting $9000 a year with potential of losing $100,000... a prepayment penalty allows him to get more for his buck... also, all lenders allow you to pay a premium up front if you'd like to waive the prepay.
You need to get yourself a mentor because i don't think you understand how interest rates work. If you pay money to have someone coach you to sell mortgages, you'll be able to pay bills again.
by the way, consumers are at fault for the bubble and the crash. They signed the contracts and agreed to the terms. With all of the policies in place to protect consumers from predatory lending and the press constantly telling consumers to beware, there is no excuse for them to be ignorant to the paperwork. These people have been lazy and greedy. They thought they could afford a payment that was ridiculous in the first place and never read the TIL or GFE or HUD that plainly disclose how their particular loan works.
How much more would you like the government to do... they can't cure stupid. |
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SeanS
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I will answer this part by part. Why doesn't the fed reduce interest rates? They are worried about inflation. Lower interest rates would help push up inflation which is already on the rise to high resource prices (Especially energy). Why don't they cap interest rates for people with bad credit? This would lead either to no more loans to people with bad credit (Due to banks being unable to fully compensate for the credit risk involved or if banks where some how forced to make loans to people with bad credit it would lead to a far too high number of under performing loans on the books, which is a recipe for banks becoming insolvent. Pre pay penalties are necessary so Mortgage Backed security investors no what they are getting and are this willing to buy these MBS's. The selling of MBSs provide liquidity to the mortgage market allowing more loans to be made and the risk of the loans to be spread out over a wider population. While it is true that option ARMs and other loans are often doomed to failure, it is the fault of the people who sold these loans and the people who took them out to reap the consequences. Those of us who where more financially responsible should not be punished. Sadly, many Realtors, bankers, builders, and contractors must go out of business as there is too many of them that entered the market due to the over abundance of credit that has been available. The market must correct itself. |
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Leo F
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You want to be rewarded for not paying your bills on time or at all. Good credit is earned. |
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bryan l
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YES YOU HAVE A VERY GOOD POINT. I think these bastards ruining these financial institutions were making these outrageous interest rates on people with bad credit banking on the notion of hey if they default and foreclose we have a appreciate assest. NOW these dummies at the banks are now in trouble as now they are deprecating items. Now they are up Sh't creek. Yes i think for home loans only if you have excellent credit you get prime, good 1 over prime and other 2 over prime none of this 10-12 percent crap. I know some one who's mortgage jumped to 11 percent and cannot refinance now due to his owes more than the home is worth. He got that lousy ARM when he bought his home 3 years ago, it was all because he had a few lates on cc debt and 1 thing in collections for 144. SHAME on the credit system for punishing him for that, he paid all of his things. You see deadbeats all the time that never pay there debts off and let is get tossed around to collectors. In his case he just came across some bad luck, but paid it and owed up to his responsibility. Now he is being over punished with high interest mortgage. That is very extreme and the government should step in and help people in situations like his and yours. |
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Terry S
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The Federal Reserve cannot lower the interest rates.
That would surely kill the dollar.
Why are we in this mess?
Greed! Pure and simple.
The sub-prime lenders loaned to people who had no business buying a home they could not afford.
Sub-prime mortgages were NEVER intended for the typical homeowner.
They were only designed for someone who was going to buy a home, fix it up and then sell it to another person.
The time to eliminate Option Arms was in 2004 BEFORE this thing turned into an absolute mess.
Now it is too late.
Look at the mortgage resets for the subprime mortgage market next year.
Aug (07) 52 Billion Dollars
Sep 58
Oct 55
Nov 52
Dec 58
Jan (08) 80
Feb 88
Mar 110!!! WOW
Apr 92
May 72
June 75
July 50 |
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