(302) 703-0727

(302) 703-0727

Authorized User Will Change September 2007 for Credit Scoring System

John Thomas August 2, 2007

September 2007 the credit scoring system is going to make a change that will affect 165 million people all at once. Who are these people? Answer – authorized users!

Fair Isaac is updating their software to eliminate the “authorized user” loophole that allowed people to piggy-back with someone who had good credit and increase their credit score 100 points in less than 30 days.

Fair Isaac estimates that there are 165 million “authorized users” and it will have a serious impact on credit scores when authorized users are virtually eliminated from the credit scoring model.  Ms. Orman’s trick of adding a child to a credit card as an authorized user when they are young so that they have good credit when they are 18 is not going to work anymore! Keep Reading...

Financial News for July 30th, 2007

John Thomas August 1, 2007

The economy grew at a 3.4% pace in the second quarter, a big improvement over the 0.6% showing in the first three months of 2007 and better than the 3.2% growth rate economists were expecting, the Commerce Department reported July 27. Also in the second quarter, core prices — excluding food and energy — rose at a rate of just 1.4%, sharply down from a 2.4% pace in the first quarter and the smallest increase in four years.

Meanwhile, consumer sentiment registered 90.4 in July, a shade below the median forecast of 91.2, but well ahead of June’s reading of 85.3, a 10-month low. The gain was tied to consumers’ favorable outlook about the economy, particularly regarding future employment and income prospects, the Reuters/University of Michigan Survey of Consumers said July 27. Keep Reading...

More Mortgagage Lenders Close Doors

John Thomas August 1, 2007

More Lenders stop funding new loans and look to be closing their doors.  Fieldstone Mortgage stopped funding new loans on July 25th, 2007.  Any loans that haven’t already funded by July 25th were dead and would not fund.

American Brokers Conduit stopped funding new loans on July 31st because they could no longer obtain credit to fund loans.  ABC hasn’t announced they are going under but the outlook is not good.

ResMae also stopped funding new loans.  Entrust Mortgage is no longer funding new loans. Keep Reading...

Interest Only – What is it?

John Thomas July 28, 2007 Tags: ,

Interest Only
Interest is what a borrower pays a lender over and above the original amount of the loan, as compensation for the use of the money over a specified period of time. An interest only loan requires a payment that pays the interest that has accrued on the loan for the current month, but with no principal reduction required at all for some specified amount of time, outlined in the Note signed at closing. Permanent mortgage loans normally only allow interest-only payments for lower cash flow for a specific number of years. The most common is the 5-year interest only product, yet there are many other types available in the marketplace. Keep Reading...

First Time Home Buyer Seminar – August 18th from 10:00AM till 12:00PM

John Thomas July 28, 2007 Tags: , ,

There will be a First Time Home Buyer Seminar on Saturday, August 18th from 10:00 AM to 12:00 PM at the Primary Residential Mortgage’s office in New Castle, Delaware.  Come learn what it takes to buy a home in Delaware. First time home buyer programs will be covered.  The program will also cover how to improve your credit and how to afford a mortgage payment that might be more than your current rental payment.  All registered participates will receive a Credit Scoring Audio CD.  Sign up for credit check at the seminar. Everybody has the opportunity to receive their complete credit report and get pre-approved to buy a home at the seminar.  You will also have the opportunity to schedule a one-on-one appointment with a mortgage professional and credit counselor who can answer questions for your specific situation.  Please call 302-703-0727 to and ask for John Thomas to register for this seminar or Register Online by clicking below: Keep Reading...

Delaware Home Improvements Turn Average Delaware Homes into Dreams Come True

John Thomas July 26, 2007

Delaware Home Improvements Turn Average Delaware Homes into Dream Come True

If you’re thinking about taking out a home improvement loan in Delaware, there are several options to consider. First and foremost, your mortgage consultant needs to know why you want a home improvement loan. Here are some factors to take into consideration.

  • How long have you been in the home?
  • Will the improvements increase the property value?
  • Are you making improvements to increase energy efficiency?
  • Will improvements be made in one fell swoop, or in stages?
  • What is the current outstanding balance on your mortgage?
  • What is the appraised value of the home?
  • How much will the improvements cost?
  • What improvements will be tax deductible?
  • Do you have other revolving debt that you would like to pay off at the same time?
  • Are you making improvements because you plan to sell the property?
The New Tract Home Blues

Buyers of newly-built homes in Delaware are often tapped out after making the initial down payment and closing costs, including upgrades to amenities and the inevitable need for new furniture. Shortly thereafter, they realize they’d like to make additional improvements to really have the home of their dreams. Keep Reading...

Fed Funds Rate – What is it?

John Thomas July 26, 2007 Tags: ,
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Fed Funds Rate

Fed Funds Rate – What is it?

Fed Funds Rate is the interest rate that Banks and other depository institutions charge each other when they lend money among each other.  The money is usually lent on an overnight basis. Federal law requires banks to keep a certain percentage of their customer’s money on “reserve” or right at hand, where the banks earn no interest on it. Consequently, banks try to stay as close to the reserve limit as possible without going under it, lending money back and forth to each other in order to maintain the proper reserve level. Similar to the Federal Discount Rate, the Federal Funds Rate is used to control the supply of available money and hence, inflation and other interest rates. Raising this rate makes it more expensive to borrow and lowers the supply of available money, which increases short-term interest rates and helps keep inflation in check. Lowering the rate has the opposite effect, bringing short-term interest rates down.

Fed Funds Rate Summary:

Knowing the facts about the Fed Funds Rate and Discount Rate are important to being fiscally literate.  These indexes are not available for lending on consumer loans such as ARM Loans but will influence what the Prime Rate will be.

If you would like to apply for a Delaware Home Loan, you can APPLY ONLINE HERE, you can call John R. Thomas at 302-703-0727.

John R. Thomas – NMLS# 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office Keep Reading...

FHA Loans – Mortgage Insurance

John Thomas July 26, 2007 Tags: ,

FHA Loans – FHA Mortgage Insurance

FHA does not fund home loans directly; rather, it provides a guarantee to the mortgage lender against default. There are two separate fees that HUD collects to provide a level of guarantee coverage to the lender:

  1. Up-front mortgage insurance premiums (UFMIP).
  2. Monthly renewal mortgage insurance (Monthly MI).

The up-front mortgage insurance premium, if required, will be 1.75% of the base loan amount. This can be added directly on top of the base loan amount to determine the total loan amount, regardless of initial loan amount or appraised value. MI can always be added to the maximum base mortgage amount.

Monthly mortgage insurance premiums for home loans closed after January 1, 2001, are refundable through the 5th year of the loan based on certain percentage increments. For example, if a borrower sells or refinances after having the property or the loan for 36 months, the borrower is entitled to a partial refund of the original FHA up-front mortgage insurance premiums.
The annual renewal premium, also referred to as the mutual mortgage insurance premium in the HUD mortgage insurance premium policy, is 0.85% per year divided by 12. This is included in the borrower’s monthly payment. Keep Reading...