Category: Mortgage

A mortgage loan is an ordinary part of financing today’s home purchase. It transfers a lien — a legal claim on a piece of real estate — to the lender, to secure the home loan. This lien is there to ensure the repayment of the loan.

It’s an age-old concept. As explained by H. W. Chaplin in the Harvard Law Review back in 1890:

When this country was colonized, about A.D. 1600, the law of mortgage was perfectly well settled in England. Theoretically our ancestors brought this law to America with them, and during the one hundred and fifty years from the first settlement to the Revolution, the English rules of law governed all these transactions…

In this time-tested fashion, a mortgage borrower pledges the home as loan collateral. Then, the borrower repays the lender over time until the final mortgage payoff.

Continue reading “Your Mortgage and the Law: An Overview”

Homes are pricey. Mortgage rates are up. Borrowers are concerned, and mortgage companies have good reasons to work hard for new customers’ business. So, isn’t it time borrowers researched our mortgages before signing up?

Yet so few of us do. Zillow® says this could be costing homeowners hundreds of dollars each month. Let’s unpack this.

Continue reading “We Compare Streaming TV Services Before Subscribing. What About Our Mortgages?”

Fannie Mae and Freddie Mac are the well-known conventional home mortgage companies. They’re classified as government-sponsored enterprises — GSEs.

Both Fannie Mae and Freddie Mac are creatures of Congress. Both are investors in the mortgage market. Both are in the business of offering guarantees to banks and brokers nationwide. And both, as they exist today, back conventional (as opposed to government-insured) loans.

So, why are there two? What’s the difference? And if you are going with a conventional loan, which will be the best pick for your mortgage? Let’s see.

Continue reading “The Best Conventional Mortgage: Fannie Mae or Freddie Mac?”

What Should I Do Now?

When the mortgage company rep says your credit check went well and your loan application is pre-approved, it’s a great day. You can go out into the world knowing just how much house you can buy. You can make offers a seller will take seriously.

As hopeful buyers are sometimes startled to learn, though, a final approval isn’t a sure thing yet. In the process of underwriting your loan, a number of things can come up to derail the closing.

Final approval doesn’t occur until you’ve found a specific home to buy. When a seller accepts your offer, you apply for a specific loan, and the underwriter gets to work.

Continue reading “I Think My Mortgage Is Falling Through”

Consider the Risk

Even though mortgage interest rates are still (historically speaking) quite low, they’re headed back up.

On April 14, 2022, Freddie Mac rang the alarm on its Mortgage Rates page:

This week, mortgage rates averaged five percent for the first time in over a decade. As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation.

With prices so high, buyers may be tempted to consider adjustable-rate loans with bargain rates.

Wondering whether an alternative to a fixed-rate mortgage could be worth it? Read on.

Continue reading “Thinking About an Adjustable-Rate Mortgage in 2022?”

Black homeowners have long faced extra obstacles when buying their homes. And in the turbulence of 2020, barriers to Black homeownership rose yet again. When the mortgage lenders tightened their approval criteria, it turns out that more minority applicants were turned away.

What’s more, Black applicants who receive loans are still paying more in interest than other mortgage holders. What’s going on here? Let’s take a look.

Continue reading “We Know It. We Denounce It. So Why Does Bias in Lending Persist?”