Archive for 'Mortgage'

Rising Home Prices Keep First Time Buyers in Limbo

With the Real Estate market heating up the last couple of years, first time home buyers are in a bit of a quandary. That 20% down payment that they were trying to save for their first home now seems to be a little harder to reach. The problem is that home prices are moving up in certain parts of the country which forces the new buyer to save more and for a longer period of time to achieve that 20% down payment . Of course, there are other options too, like VA or FHA financing which require less in the way of a down payment.

For future home buyers wondering when to stop saving and get into the housing market, the math is clear: the sooner the better. With home values forcasted to rise in every major U.S. metro over the next year, a 20 percent down payment on the median-priced home today will cost thousands of dollars more just one year from now.

Nationally, the median home will be worth $6,275 more a year from now, according to Zillow®‘s home value forecasts. That means the average U.S. buyer will need to save an additional $105 a month – $1,260 total over the next year – just to account for how much more a 20 percent down payment will cost a year from now.  

In hot coastal markets like San Jose, home values are expected to rise as much as $35,934 by this time next year, the highest annual dollar increase of the metros analyzed. A buyer in 2018 will then need $7,188 more for a down payment on the median home than they would today. For those saving on a monthly basis for a future home purchase, that equates to putting away an additional $599 a month just to keep up with home value appreciation, let alone whatever else is needed for the down payment itself. Future home buyers in Seattle, San Diego and Riverside, Calif. can also expect to spend thousands of dollars more on down payments for the median home a year from now.

Saving for a down payment is one of the biggest hurdles to homeownershipi. That may be why more than half (59 percent) of all first-time buyers today put less than 20 percent down on their home purchase, according to Zillow Group’s Consumer Housing Trends Report 2017. However, a small down payment does not come without risks. The report also found that buyers with larger down payments are more likely to get their offer accepted, averaging just 1.9 total offers before winning their house compared to 2.4 for buyers with lower down payments. When time is money, a low down payment can be costly.

“Sky-high rents and rising home prices are putting first-time buyers in a bit of a catch-22,” says Dr. Svenja Gudell, Zillow chief economist. “Buying now with a low down payment can be riskier, and the offer may not be considered as competitive by the seller. However, a renter who saves for another year to reach a larger down payment may find that the home they love today is outside their budget a year from now. For those considering buying in the next year, getting into the market today may make more financial sense than they think.”

Buyers can use the Zillow affordability calculator to see how much they can actually afford to spend on a home, based on their income, debt and savings. The Zillow mortgage calculator can also provide custom down payment estimates based on home price and interest rates.

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

i According to the first Zillow Housing Aspirations Report (ZHAR), a semi-annual survey of 10,000 Americans seeking insight into their views on homeownership and their housing plans.


Google Enters the Mortgage Loan Business

Google Enters the Mortgage Loan Business

Google Enters the Mortgage Loan Business-Image by James Marvin Phelps via Flickr

LoanSifter, Inc. (, provider of the mortgage industry’s most complete and intuitive product and real-time pricing platform, announced today a strategic relationship with Google Inc. that gives consumers access to mortgage loan products and real-time pricing based on LoanSifter’s technology, including side-by-side comparisons of mortgage loan products from multiple lenders through Google’s Comparison Ads.

Google’s Comparison Ads help consumers shop for mortgages online by retrieving quotes based on the borrower’s specific loan criteria.  Through a strategic relationship between both companies, Google will leverage LoanSifter’s industry-leading technology – which automates pricing for lenders using the largest real-time database of investor pricing and eligibility content available in the mortgage industry — to provide Google users with information on mortgage products and pricing from the lenders using LoanSifter.  When Google users get these rates, LoanSifter’s lenders will receive qualified online leads.

Greg Ulrich, production manager at Fairway Independent Mortgage Corporation in Colleyville, Texas, believes that Google’s popularity provides a great opportunity as another channel for borrowers to reach the company, without substantial investment costs.  “This saves us money, allowing us to pass a greater savings to the consumer,” Ulrich said.

“We chose LoanSifter for our Google auto-quoting because it enables us to customize our pricing more accurately and effectively,” Ulrich added.  “Other vendors require manual supervision, which would have been problematic in keeping up with market shifts.”

Consumers who search for popular mortgage-related terms or phrases on Google are drawn to Google’s proprietary mortgage Comparison Ads, where they can anonymously provide details such as their desired loan amounts and credit scores.  Google will then retrieve multiple reliable offers from dependable lenders, placed side-by-side so the borrower can compare them.  After investigating different scenarios and choosing a lender, the borrower is then able to contact the lender by phone or e-mail.  Borrowers do not have to fill out lengthy forms or click through walls of advertisements in order to access up-to-the-minute loan products and rates, and the leads generated to lenders are anonymous, so that borrowers can protect their private information until they are ready to move forward in the mortgage process.

“Our relationship with Google will be of tremendous benefit to both lenders and consumers,” LoanSifter President Bruce Backer said.  “A growing number of borrowers are using the Internet to find the best possible mortgage deals, and Google’s immense popularity makes it a first stop for many.  Borrowers benefit from the side-by-side comparison in an open marketplace, while lenders benefit from LoanSifter’s ability to accurately price mortgage scenarios on their behalf.”

About LoanSifter

LoanSifter, Inc. provides the banking industry’s most comprehensive tools for mortgage bankers, loan officers and secondary departments to price, market and manage loans. The company’s flagship technology solution is an accurate, web-based product and pricing solution providing bankers with advanced tools to improve their service levels and increase profits. LoanSifter boasts the most comprehensive investor database in the industry with over 160 correspondent and wholesale investors. LoanSifter is also the leader in delivering point-of-sale (POS) and marketing tools to lenders and loan officers, including its eOriginations suite solution, offering highly customizable website utilities (automated consumer-facing pricing search), automated email campaigns, automated quoting for Zillow and LendingTree, scenario-specific rate monitoring alerts, and automated marketing materials. Founded in 2004, LoanSifter is headquartered in Appleton, Wisconsin.  For more information about LoanSifter, call 920.268.4770 or visit

Warren Lutz
Strategic Vantage Marketing & Public Relations
(925) 270-3941

Web Site:

Top Mortgage Brokers Reveal their Secrets

A survey of some of the highest-volume loan originators provides valuable insight into the practices and services used by this elite group. The report addresses marketing, technology and mortgage compliance.

Conducted in July 2011, the 2011 Loan Originator Survey from indicates that mega-producers are maintaining elevated originations despite increased regulatory burdens.

The report was based on a survey of 80 respondents who fall within the top 1 percent of all U.S. originators. Originators who are “the best of the best” were asked more than 50 questions.

Three quarters of this group make at least $250,000 a year.

The co-sponsors of the report include EZ Rate Quotes LLC, Mortech Inc., Mortgage Information Services Inc., Motivity Solutions Inc. and Mortgage VCO.

Most of the respondents were male, and three quarters were between the ages of 36 and 55.

Taking care of existing referral sources was considered very effective by a majority of the respondents. Almost all of the participants indicated that customer satisfaction is “very important.”

The originators also commented on marketing efforts through other channels and had some surprising responses to questions about the use of social media and mortgage leads.

The report also examines the use of smart phones and tablet devices such as the iPad.

The “best of the best” commented on how they select service providers. They identified which providers they use for loan origination systems and pricing engines.

Mortgage brokers and originators who use wholesalers or correspondent lenders listed their top-three third-party lenders. There was a trio of indirect lenders that dominated these rankings.

The loan officers are highly concerned with the growth of mortgage regulations, though the group has managed to succeed despite stiffer compliance requirements and more cumbersome loan processing.

The report discusses how this successful segment of the mortgage sales workforce complies with requirements for the appraisal ordering process. Also covered are automated valuation models.

The report will help sales managers develop a better sales force, while loan originators can learn from the best. Service providers can use the study to learn about what makes these super-producing loan originators tick.

The 2001 Loan Officer Survey is available at:


Founded in 1998, is a dominant online source of mortgage news and mortgage statistics for the mortgage industry

Holly Himelright

CashCall Mortgage, a division of CashCall, Inc. announced today that it is seeking 520 new employees as part of its expanding operations throughout the country. The company is actively looking to hire 270 licensed mortgage agents, as well as 250 underwriters, funders, processors and shippers.

The continued expansion of CashCall Mortgage is not exactly a surprise after the company’s record-shattering loan production in August, but the number of new jobs announced surpasses what analysts had been predicting. In fact, this new round of CashCall hiring comes on top of the 230 new jobs already created in the third quarter of this year.

Originally known for unsecured personal signature loans, CashCall, Inc. established its Mortgage Division in 2008 and has experienced continued growth in that sector, particularly in the second and third quarters of this year.

“It seems that consumers are becoming smarter shoppers and realizing that lenders such as CashCall offer the same mortgage refinancing as the big banks, but at lower rates, and often with less hassle.” said J. Paul Reddam, CEO and President of CashCall, Inc. “We don’t have anywhere near the overhead as the big banks, and we’ve been able to pass those savings on to our customers in the form of lower interest rates and no closing costs. We’re thrilled to help consumers save money on their mortgages, and be a positive part of the economic recovery by creating hundreds of new jobs.”

These additional jobs will primarily be in the company’s Anaheim and Las Vegas locations, welcome news to two cities that have been suffering from the recession, including higher unemployment rates than the national average.

One of the reasons for CashCall Mortgage’s consistent growth has been its management experience, strength and depth. CashCall was founded by Reddam, the founder of DiTech Funding Corporation, one of the first direct mortgage lenders back in the 1990’s. Under Reddam’s leadership, DiTech became one of the top direct lending mortgage companies before it was sold to GMAC Mortgage.  Dozens of CashCall’s senior executives and management staff are individuals who worked for Reddam at DiTech, and have now joined him in making CashCall one of the premier mortgage lenders in the country.

Marc Dooley
CashCall, Inc.

Founded in 2003, CashCall, Inc. has grown to become one of the nation’s premier consumer finance lenders. Headquartered in Anaheim, California, the company employs more than 800 lending professionals, each dedicated to providing exceptional customer service. CashCall has been able to simplify and streamline the loan process, through the seamless coordination of online and offline services to make the process faster, easier and hassle-free.

CashCall Mortgage specializes in low interest mortgage loans and home refinancing for borrowers with good credit. Founded by the people who started the very first direct mortgage company in 1995, CashCall Mortgage has streamlined the application and lending process, reducing their own costs and passing these savings on to customers by undercutting larger banks and lenders with lower interest rates no application fees, deposits or points. CashCall Mortgage offers a variety of products such as 10, 15, and 30-year fixed rate loans, the FHA Loan, as well as 125% Second Mortgage, allowing you to borrow up to 125% the value of your home.

Mortgage Giant Settles in Manhattan

Mortgage Master, Inc., one of the nation’s largest independently owned mortgage companies originating $6 billion in loans annually, has opened an office in Manhattan to serve the city’s vibrant housing market. The new office, which is licensed in New York, Connecticut and New Jersey, will handle the purchase and refinancing needs for thousands of residents in the Tri-State area.

“The Manhattan housing market has been remarkably resilient,” said Marc Kunen, head of Mortgage Master’s Manhattan office and a veteran mortgage specialist. “Establishing a foothold in the city will allow us to compete as one of the lowest cost providers and avail those savings to our customers.”

Based in Walpole, MA, Mortgage Master continues to see strong demand as low mortgage rates spur homeowners to refinance and renovate their homes. Kunen also expects to see more customers take out new loans as housing prices in the Tri-State area begin to firm. “There are an awful lot of people poised to buy right now,” he said.

The company, which is licensed in over 20 States with branches in 9, funded approximately $6 billion in 2010 and continues to expand its reach in the mortgage market.

“Our company has been successful because we open offices in markets like Manhattan where we know we are dealing with a stable, reliable community of borrowers,” said Mortgage Master CEO Leif Thomsen.  “The housing market is growing in the Metropolitan area, and we want to contribute to that growth by offering low cost loans to the community.”

Prior to joining MMI to open the Manhattan office, Marc was with GFI Mortgage Bankers as a managing director where he built their Manhattan branch into a $200 million residential mortgage division.  He also worked for Preferred Empire Mortgage Company as a senior loan officer and was ranked among the top loan officers in the U.S. by MOM.  He holds an MBA from NYU’s Stern School of Business and graduated with a B.S. in Business from SUNY Buffalo.  Marc is a native New Yorker, and is exceptionally familiar with the local real estate market and its financing nuances.

The new Mortgage Master office is located at 590 Madison Ave., New York, NY 10022.

About Mortgage Master

Mortgage Master, Inc. ( is a Massachusetts Company founded in 1988 by Mr. Leif Thomsen. Since then, the company has grown to become the largest volume lender of mortgages in Massachusetts. Mortgage Master is the country’s largest independently owned mortgage company, consistently lending over $6 billion each year. Mortgage Master employs more than 500 employees nationwide, with approximately 240 loan experts providing loans and services in approximately 20 states.

The corporate headquarters is located in Walpole, MA, with satellite offices in California, Connecticut, New Hampshire, New Jersey, New York, Pennsylvania, Maryland, and Rhode Island. Mortgage Master employs more of the top 200 loan officers in dollar volume than any other lender in the U.S.

More than 2,000 mortgage jobs have been eliminated this year, according to the Second-Quarter 2011 Mortgage Employment Index from But falling rates and worsening loan performance could lead to increased hirings in the second half.

The index, which reflects hirings and layoffs tracked by, was down almost 500 jobs in the second quarter. Nearly 5,000 hirings weren’t enough to offset more than 5,000 layoffs.

Still, the contraction was less severe than the first quarter. But activity swung from growth of more than 700 jobs during the same period last year.

Quarter Layoffs Hirings Net
Q2 2011 5,404 4,940 -464
Q1 2011 4,318 2,513 -1,805
Q2 2010 2,028 2,768 +740

Real estate finance positions in California were off more than a thousand jobs — the worst of any state. But Ohio’s gain of 800 jobs was the best performance.

State Q2 Net Gain/Loss
CA -1,078
PA -292
NC -276
OH +800
KY +400
MO +222

Nearly half of all layoffs tracked were at Wells Fargo, which cut mortgage fulfillment staffing and closed its reverse mortgage business.

More than half of all second-quarter hirings occurred at Chase, which hired hundreds in Ohio.

Company Net Gain/Loss
Wells Fargo -2,500
BofA -954
Kondaur -161
JPMorgan +2,585
USBank +394
MetLife +200

Hirings could pick up as rates have recently fallen to record lows — sparking a refinance rally and boosting demand for loan originators, processors and underwriters as well as other production personnel.

However, since some of the biggest lenders already made massive job cuts this year, this group might be reluctant to staff up too quickly. Instead, small- to mid-sized mortgage bankers and brokers are likely to quickly capitalize on the building refinance wave.

In addition, deteriorating delinquency and bloated foreclosure inventories could drive additional recruiting by mortgage servicers.

Department of Labor data indicate that mortgage jobs fell to 239,100 as of June from 244,700 at the end of the first quarter and 259,700 at the end of 2010.

The complete Mortgage Employment Index report — including full tables by state, year and company — is available at:

Mortgage employment news is available online at:


Founded in 1998, is a dominant online source of news, statistics and analysis for the mortgage industry. Visit us online at

Holly Himelright

Web Site:

Credit Union Offers a Low Interest No Fee Mortgage

Credit Union Offers a Low Interest No Fee Mortgage-Image via Wikipedia

BECU announced today that it has introduced a new 12-Year No Fee Mortgage to help consumers who have been reluctant to refinance and take advantage of the historically low mortgage rates.  With the BECU 12-Year No Fee Mortgage, members will be able to take advantage of the low interest rate environment and receive an interest rate comparable with a 10 year fixed rate mortgage without paying hundreds or even thousands of dollars in closing costs or fees.

“BECU’s vision is that qualified homeowners should be able to access these historically low mortgage rates,” said Bob Stroup, BECU’s Vice President of Member Strategies.  “The 12-Year No Fee Mortgage was designed for consumers with a low balance on their current mortgage who desire to have the financial freedom of owning their home in 12 years or less but have been reluctant to refinance to a lower rate because of closing costs and fees.”

Many current mortgage holders have done the refinance math and come up short.  When they factor in the low balance they maintain with their current mortgage, and the associated closing costs associated with refinancing, they are not refinancing.  BECU wanted to give these consumers an easy way to make refinancing a reality.

Description of 12-Year No Fee Mortgage

  • For the refinance of a primary residence
  • Available to members in Washington, Oregon, California, Arizona, Illinois, Pennsylvania, Kansas, and Missouri
  • Minimum loan amount of $35,000 with a maximum loan amount of $200,000
  • Maximum loan to value of 80% including cash-out
  • No prepayment penalties
  • Borrower is responsible for paying all fees and charges imposed by an existing lender
  • Borrower is responsible for payment of interim interest, property taxes and insurance premiums (if due)


About BECU

Governed by a volunteer Board of Directors, BECU is a not-for-profit credit union owned by the members. Profits are returned to the members in the form of better rates and fewer fees. With more than 700,000 members and more than $9.5 billion in assets, BECU is the largest credit union in Washington and one of the top five financial cooperatives in the country. BECU currently operates over 45 locations in the Puget Sound region.  All Washington state residents are eligible to join.

What is a Reverse Offer in Real Estate?

Reverse offers are a new phenomenon on today’s real estate scene. The fact that the market is clearly a buyer’s market has caused sellers who need to sell their property to come up with some new ideas. One of these is the reverse offer. What is a reverse offer and how does one go about using this tactic?

Instead of the normal approach where a buyer looks the home over and makes an offer to the seller, with reverse offers it is the seller making the offer. There are actually a few approaches one can use. For sellers whose homes have been on the market for some time, the agent for that seller might go back to all the people who have looked at the home and make them an offer to buy the property. Another approach is to have the agent approach a particular potential buyer who has come back and looked at the property more than once and who has expressed interest in it.

Needless to say it does not make sense to reiterate the same offer all over again that the potential buyer was aware of when they looked over the property. Some other incentives need to be added to make the deal look more interesting. One way to do this is with a lower price, but other enticements can be used as well, such as paying the closing costs for the buyer, or perhaps buying down their mortgage rate a bit. Other tangible property could also be put into the deal, such as an automobile or a large screen TV, for example.

There are a few particulars to keep in mind when putting together this kind of a proposition.

In order to create some sense of urgency in the mind of the buyer, make the reverse offer valid for just a short period of time. One, two, or at most three days would be appropriate. Also, if the offer is being extended to more than one potential buyer, let everyone know that others will receive the same offer and that the person who gets the home will be the first one who responds.

Additionally, if you are going to approach a person who has come back and looked at the house more than once, ask you agent to contact the agent for the buyer and try to find out exactly what the issues were that kept that person from buying the home in the first place. If the buyer’s real reasons for hesitating can be determined, perhaps the problems can be addressed without to much work or too much cost.

Reverse offers can be a good approach for people who are very motivated to sell their property but who face a lot of competition. There might be other similar homes for sale in the neighborhood, or perhaps there are foreclosed properties on the market. Showing some creativity and eagerness to sell might be the thing that gives you an edge. Remember, foreclosures come with lower prices, but if a bank owns the property it will be sold “as is”, and any unseen problems will be the responsibility of the buyer later on.

Visit Denver Condo and grab your copy of the free report “How to Save Money on Mortgage Closing Costs”. And check out these Tips for Becoming a Homeowner.

LendingTree Releases Latest Mortgage Rates

Average mortgage rates rose slightly after declining for several weeks according to the LendingTree Weekly Mortgage Rate Pulse, which tracks the lowest and average mortgage rates offered by lenders on the LendingTree network.

On June 28, average home loan rates offered by LendingTree network lenders were 4.69% (4.93% APR) for 30-year fixed mortgages, 3.93% (4.29% APR) for 15-year fixed mortgages and 3.39% (3.56% APR) for 5/1 adjustable rate mortgages (ARM). Rates for both 30-year and 15-year mortgages fell slightly week over week.

On the same day, the lowest mortgage rates offered by lenders on the LendingTree network were 4.25 percent (4.39% APR) for a 30-year fixed mortgage, 3.375 percent (3.61% APR) for a 15-year fixed mortgage and 2.75 percent (3.04% APR) for a 5/1 ARM.  Rates for 30-year and 15-year loans fell by one-eighth of a point week-over-week, while 5/1 ARM rates were flat.

The following table shows a snapshot of the lowest mortgage rates for a 30-year fixed loan offered by lenders on the LendingTree network, as well as average loan-to-value ratios and negative equity by state.


*Updated Quarterly

US Average 4.25% (4.39% APR) 70.2% 35.0%
Alabama 4.25% (4.39% APR) 67.0% 28.9%
Alaska 4.75% (4.95% APR) 66.3% 17.3%
Arizona 4.25% (4.37% APR) 94.6% 39.4%
Arkansas 4.25% (4.37% APR) 72.6% 43.9%
California 4.25% (4.38% APR) 70.6% 34.8%
Colorado 4.25% (4.42% APR) 71.9% 22.2%
Connecticut 4.25% (4.36% APR) 59.5% 43.3%
Delaware 4.25% (4.36% APR) 67.6% 50.3%
District of Columbia 4.25% (4.48% APR) 58.3% 25.5%
Florida 4.25% (4.39% APR) 90.8% 41.1%
Georgia 4.25% (4.39% APR) 80.9% 25.8%
Hawaii 4.38% (4.50% APR) 54.2% 25.4%
Idaho 4.25% (4.39% APR) 73.4% 29.8%
Illinois 4.25% (4.37% APR) 72.4% 31.7%
Indiana 4.25% (4.38% APR) 69.4% 28.5%
Iowa 4.63% (4.82% APR) 66.7% 42.9%
Kansas 4.63% (4.82% APR) 70.5% 31.8%
Kentucky 4.25% (4.39% APR) 67.6% 53.1%
Louisiana 4.63% (4.82% APR) 78.5% 75.5%
Maine 4.25% (4.37% APR) 58.6% 30.1%
Maryland 4.25% (4.39% APR) 70.4% 25.6%
Massachusetts 4.25% (4.37% APR) 60.7% 46.0%
Michigan 4.38% (4.52% APR) 84.3% 32.2%
Minnesota 4.25% (4.36% APR) 65.6% 22.2%
Mississippi 4.63% (4.82% APR) 78.4% 30.1%
Missouri 4.25% (4.39% APR) 71.6% 31.0%
Montana 4.75% (4.95% APR) 60.2% 33.4%
Nebraska 4.63% (4.82% APR) 72.3% 46.5%
Nevada 4.75% (4.95% APR) 118.0% 55.3%
New Hampshire 4.38% (4.49% APR) 69.8% 25.2%
New Jersey 4.25% (4.36% APR) 62.2% 29.0%
New Mexico 4.25% (4.40% APR) 66.4% 45.8%
New York 4.25% (4.36% APR) 50.1% 42.1%
North Carolina 4.25% (4.39% APR) 71.2% 33.2%
North Dakota 4.63% (4.82% APR) 60.1% 37.7%
Ohio 4.38% (4.50% APR) 75.4% 27.0%
Oklahoma 4.25% (4.37% APR) 71.0% 52.4%
Oregon 4.25% (4.41% APR) 69.6% 19.6%
Pennsylvania 4.25% (4.37% APR) 62.5% 75.7%
Rhode Island 4.63% (4.82% APR) 62.6% 36.6%
South Carolina 4.25% (4.39% APR) 71.0% 29.0%
South Dakota 4.25% (4.37% APR) N/A N/A
Tennessee 4.25% (4.39% APR) 71.2% 30.7%
Texas 4.25% (4.38% APR) 68.8% 30.6%
Utah 4.25% (4.49% APR) 73.7% 22.2%
Vermont 4.63% (4.82% APR) N/A N/A
Virginia 4.25% (4.39% APR) 71.7% 25.0%
Washington 4.25% (4.40% APR) 67.9% 21.4%
West Virginia 4.75% (4.95% APR) 67.0% 68.0%
Wisconsin 4.75% (4.95% APR) 68.3% 35.6%
Wyoming 4.25% (4.36% APR) 64.2% 23.0%

For more information on current mortgage rates or for state specific mortgage rates, please visit

The LendingTree Weekly Mortgage Rate Pulse is published every Wednesday. Home loan rates above are reflective of actual rates offered to borrowers by lenders on the LendingTree network. Lowest rates shown reflect the payment of one discount point. Rates will vary based on the borrower’s loan details and credit profile. Visit to learn more.

About LendingTree, LLC

LendingTree, LLC is the nation’s leading online lender exchange and personal finance resource, helping consumers take charge of all their financial decisions, from budgeting to money management to mortgages to credit cards and more. LendingTree provides a marketplace that connects consumers with multiple lenders that compete for their business, as well as an array of online tools to aid consumers in their financial decisions. Since inception, LendingTree has facilitated more than 28 million loan requests and $214 billion in closed loan transactions. LendingTree provides access to lenders offering mortgages and refinance loans, home equity loans/lines of credit, and more. LendingTree, LLC is a subsidiary of, Inc. (NASDAQ: TREE). For more information go to, dial 800-555-TREE , join our Facebook page and/or follow us on Twitter @LendingTree.

Nicole Hall
(704) 943-8463

The amortization period denotes the number of years you have to pay your mortgage balance in full. The length of your amortization period will have a great impact on the total actual cost of your mortgage. For years, the banking industry had been using a standard amortization period of 25 years. Most lenders use this benchmark when they discuss mortgage offers. Longer or shorter time frames, however, are also possible.

A shorter amortization period means you become mortgage-free earlier, pay significantly reduced interest, and establish home equity faster. Equity means the difference of the home’s market value and any outstanding mortgage on it; how much money you can claim as asset. You can then use your equity as security for financing the education of your children, home renovations, other property investments, and many others.

However, there are other considerations to bear in mind. Since you are making the actual number of payments fewer, the amount of each regular payment you will be making will increase. So, if you do not have a regular source of income, or if it is your first time to buy a home and you will be laden with a heavy mortgage, this option may not be the best for you. However, if you can comfortably pay the higher fees and you want to save money, or perhaps you just want to be out of debt as quickly as possible instead of being in debt for an extended time period, it would be a good idea to have a shorter than standard amortization period.

A longer period of amortization also has its advantages. You can have your dream home more quickly with a longer period of amortization. When applying for a mortgage, lenders compute the ceiling amount you can afford as regular payment. That amount is then used to compute the total amount they will loan as mortgage. A longer period of amortization lowers the regular principal amount and interest payment by allocating payments over a longer time period. So you could be entitled to a greater mortgage amount than you expected, or be qualified for your mortgage earlier than you projected. Whichever way, you end up with your dream house sooner than you imagine. A longer period of amortization may appeal to majority of people as regular payments are can be similar or even cheaper than paying rent, but in the long run, it also means having to pay more interest over the duration of the mortgage.

Whatever the amortization period you chose when you first got your mortgage, you can always change it. You can always shorten the period of amortization and employ alternatives like accelerated payment, giving additional payments like Double Up, or a per annum lump sum prepayment of the principal, to minimize interest costs. Also, regularly re-evaluate your amortization approach especially when mortgage renewal time comes. As your job and salary improves, you can raise the amount of your regular payment by as much as 10% once annually. All of the said prepayment features help to shorten your amortization period by years, and cut your costs on interest.

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