Adjustable rate mortgage, is it right for you?

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. Even if you just want a title insurance rate quote. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

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Ziggy cartoon pokes fun at adjustable rate mortgages (ARM.)

 

 

As the cartoon implies, an ARM customarily has payments that change with changes in the interest rate.

 

When first introduced about 30 years ago, no one knew quite what to make of them.  Even the Federal government was confused and had to come up with an entirely different formula for calculating the annual percentage rate, APR, on such loans.

 

ARMS were touted as cost savers because the initial interest rate was often a teaser rate, below what fixed-rate mortgages were being offered.  That aspect became the biggest target for fixed-rate lenders to aim at, introducing the concept of "rate shock" into the mix by frightening borrowers with the prospect of massive jumps in payments when the ARM mortgage interest rate adjusted.

 

Point of fact, ARMS have never been the bogeyman they were touted to be. There have been abuses in the ARM loan process, namely, writing loans with negative amortization, fixed payments, and the like, but the basic ARM remains a good way for a first-time homebuyer to get her foot in the door.

 

If you would like to know more about ARMS, read this booklet from the Consumer Finance Protection Board.

 



For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Buying a “trailer home” could cost you more.

We used to call them “trailer homes” or “mobile homes” but the more accurate phrase, one used in the NY Times is “manufactured homes.”  Simply defined they are factory-built structures that are transported to a leased or buyer-owned lot.  Unfortunately, as the Times reports, they

offer a realistic possibility of homeownership for many lower-income buyers. But financing options are limited and expensive, which has sparked calls for reform.

These homes cost less than half as much as the estimated $94-per-square-foot national average for new site-built housing, the report found. A new, single-section manufactured home sold for an average of $43,000 in the first half of 2014, excluding transport and siting costs.

According to the Times’ coverage of a report issued by the Consumer Finance Protection Bureau,

most owners of manufactured homes pay much higher loan rates. Loans for the purchase of these homes are concentrated among a handful of lenders, the largest of which are 21st Mortgage Corporation and Vanderbilt Mortgage and Finance, both subsidiaries of Clayton Homes, a manufactured-housing provider and a division of Berkshire Hathaway.

Part of the difficulty financing a manufactured home arises from the fact that it located on a leased lot.  Think of obtaining a loan on a car.  That’s exactly the same with a manufactured home.  These loans are more expensive because the lender has a lien on something movable.  As the Times points out,

If they own the lot under the house, the property may be titled as real property, making it eligible for a mortgage.

Want to know more? the full article is here.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Flood insurance - a primer for homeowners

What is a "flood" that is covered by flood insurance?  Well, it's not a sewer backup unless you purchase that specific coverage from your insurance broker.

Writing in the Detroit Free Press Susan Tompor covers " Hard lessons about flood insurance policies."  Among them, know what your policy insures.

Many sewer lines across the country are aging. Pipelines that handle both storm water and sewage can become overwhelmed and back up.

J. Robert Hunter, director of insurance for the Consumer Federation of America, said his son faced damage from a backed-up sewer in Baltimore and was covered. But he said many people don’t realize they need to buy an endorsement or they don’t ask if their standard policy offers the coverage.

So, before the next storm or sewer backup, it might be a good idea to check your flood insurance and homeowner's insurance policies to determine what is and is not covered.  Read the full article.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Your Money: Pros and cons of reverse mortgage vs. home equity line of credit

Is a reverse mortgage right for you? Vested Land Services can help.

Karin Price Mueller writes a great column for the Star-Ledger where folks get to ask a finance or business related question.  One that intrigued me this week was this:

Q. I don’t get it. When people own their home, wouldn’t it be more advisable to get a home equity line of credit or loan than a reverse mortgage? At least a HELOC is low interest (right now) and tax deductible! If anything happens to the owner — death, bankruptcy — the funds are deducted from the sale of the house. Right?

— Curious

It's a good question because a lot of mystery surrounds reverse mortgages.  Frankly, they are not for everyone.

Here's part of the reply to Curious:

The major difference between a reverse mortgage and a home equity loan or line is that with a reverse mortgage, no payments are made by the homeowner while the homeowner remains in the home, said Howard Hook, a certified financial planner and certified public accountant with EKS Assoc. in Princeton.

Compare that to home equity loans, which are typically are amortized over a period of time whereby principal and interest is paid by the homeowner, he said. A HELOC requires interest to be paid for a period of time, and then at some point, both the principal and interest will be amortized.

I recommend you read the full column here.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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News about banking, real estate and finance

Vested Land Services LLC brings you news about banking, real estate and finance

'Bring It On,' Frank Tells Dodd-Frank Critics at Hearing
Bloomberg | July 23, 2014
It was 2010 all over again in the U.S. House Financial Services Committee. Barney Frank, the panel’s former chairman, returned to Washington today to sit before the committee and provide a feisty defense of that year’s regulatory overhaul, the Dodd-Frank Act that bears his name. The hearing split along partisan lines in support of and opposition to the wide-ranging law passed in response to the 2008 financial crisis.

Un-advertised Listings Distort Housing Inventory
CNBC | July 22, 2014
While the number of homes for sale nationwide is showing signs of inching up, inventories still remain constrained in many housing markets across the country. Could “pocket listings” — for-sale properties that aren’t marketed widely or posted on the MLS — be the real culprit?

U.S. Mortgage Applications Rise in Latest Week
Reuters | July 23, 2014
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 2.4 percent in the week ended July 18.

CFPB, FTC File Nine Lawsuits Against Deceptive Foreclosure Firms
HousingWire | July 23, 2014
The Consumer Financial Protection Bureau, the Federal Trade Commission and 15 states are filings 9 lawsuits against companies and individuals that collected more than $25 million in illegal advance fees with false promises to prevent foreclosures. The CFPB is filing 3 lawsuits, while the FTC is filing 6 lawsuits.

Majority of Buyers Unaware of True Costs of Home Ownership
Realty Mag | July 23, 2014
While the majority of home buyers recently surveyed say they feel financially prepared for home ownership, many admit they aren’t sure what purchasing a home will actually cost them, according to a poll of more than 1,000 prospective home buyers conducted by Discover Home Loans.

7 Signs of a Soon-to-be-Hot Neighborhood
Inman News | July 23, 2014
Here are the top telltale signs of a soon-to-be hot market.

1 in 6 Homes Still Seriously Underwater as Home Price Growth Slows
HousingWire | July 24, 2014
Down 26% from 2013, but decline slowed with slowing price gains.

Community Bankers: CFPB Must Modify QM Rule
Mortgage Professional America | July 23, 2014
Community bankers are urging the Consumer Financial Protection Bureau to revise the current qualified mortgage rule.

U.S. Housing Turning the Corner, Inflation Creeping Up
Reuters | July 22, 2014
U.S. home resales hit an eight month-high in June, suggesting the housing market was gradually regaining momentum and would help the economy to stay on a higher growth path this year.

HUD Ranks No. 2 Ugliest Building in Washington
Reversed Mortgage Daily | July 22, 2014
The Department of Housing and Urban Development may have made a lot of headway of late on reverse mortgage program changes and bolstering its Mutual Mortgage Insurance Fund after several years of economic turmoil, but it’s still one of the ugliest buildings in Washington, according to a Buzzfeed compilation.


Vested Land Services is a proud member of the American Land Title Association which provided the above.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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