If you are planning on buying a home soon and taking advantage of the low mortgage rates, you should keep an eye on the latest financial reforms that could be taking place.

Much of the financial reforms being discussed in Congress and the Senate have to do with big banks and large finance. However, some of the new regulations included in the reform have officials at the Mortgage Bankers Association concerned. Here are some of the new guidelines and regulations being proposed before the July 4 recess.

Paying Loan Originators
If the proposed financial regulations get passed the way they are, lenders will no longer be allowed to pay brokers extra for suggesting more expensive loans to borrowers. For years, independent brokers were given financial incentives for putting home buyers into mortgage loans with higher interest rates than they deserve. According to Ruth Susswein, an official at Consumer Action, it’s illegal for brokers to do this.

Penalties for Prepaying
Some homeowners are able to pay large portions of their mortgage off before the scheduled deadline. Some may even come into some money and be able to pay it off completely. Unfortunately, many mortgage loans were written with language that would penalize the homeowner for doing this. In many cases, they could be charged thousands of dollars simply for paying off their mortgage a few years earlier than the terms of the loan. These penalties will be reduced under the new financial reforms that are being discussed right now.

Payment Abilities
One of the reasons we got ourselves into the mortgage mess that we are in is because banks and lenders were giving loans to home buyers who did not have the ability to make the payments. Whether they were jobless or they just didn’t make enough to make the payments, thousands of homeowners defaulted on their loans because they simply did not have the ability to make their payments.

The new legislation would prevent that from happening by making lenders more accountable for the loans they give out. They will need to document the income of home buyers before letting them purchase a home and they must have a “reasonable belief” that the people can make the loan payments before making the loan final. As weird as it sounds to put this into law, apparently it should have been done a long time ago and maybe the mortgage crisis would not have been as bad as it turned out to be.

These are just a few of the changes we can expect if the reforms get passed. There are a few more stipulations that we will cover in a future post this week. Until then, do you think these reforms are going to be good news for the mortgage industry? Or do you think they are just a quick bandage that won’t change much because it’s already too late? Let us know your thoughts.

It’s difficult to stay out of the home buying business these days with the mortgage rates so low. If you are feeling the itch to get your first home or even if you want to upgrade to a new home from your existing home, now is probably the best time to do it. In order to get that rate, though, you have to be sure your credit is up to par.

Some people will do things to improve their credit score so they can get decent mortgage rates. Unfortunately, some of the things they are doing to help their credit rating are actually sabotaging their score. Here are some of those traps that you should know about so you can avoid them at all costs.

Closing Old Accounts
You may think closing old credit accounts will help bring your credit score up. If you had trouble paying those accounts in the past and recently paid them off, your first instinct may be to close them so they no longer show the negative information from the past. Unfortunately, this hurts your credit score drastically. The negative information is still on your report regardless of closing the account or not. In addition, part of your credit score is based on the average length of your credit accounts. If you keep accounts open that you have had for several years, it will create a better average and improve your score.

Applying for More Credit
If you are planning on buying a home, keep your new credit accounts to a minimum. Opening several new accounts can wreak havoc on your credit score and bring it down to a level that will not get you a good mortgage rate. As tempting as it may be to apply for every pre-approval that comes in your mailbox, it is not conducive to getting a good rate because it drops your score too far. Stay away from doing this especially in the months leading up to your decision to actually apply for a home mortgage loan.

Waiting Too Long to Pay Your Bills
Just because you send your bills in before the due date does not mean they are going to apply to your account by the time they are actually due. Even making your payments online does not guarantee they will be applied in time. Sometimes it may take a few days before the payment applies which can result in late charges and penalties. This looks bad on your credit history and drops your score. Always make sure you allow plenty of time for your payment to apply to keep your score as high as you can.

In terms of your credit score and history, some things you do not know may hurt you. Be an informed consumer and home buyer so you can make the best decisions and get the best mortgage rates possible.

Today’s mortgage rates are at an all time low. We may never see rates like this come around ever again. As a result, many families are buying a home for the first time ever. They are looking for the home that fits their budget but also one that fits into their dream as it may be the first and only home they ever buy during their lifetime. Forbes Magazine recently released a list of the best places in the United States to raise your family. Here are some highlights from that in case this is an important factor for you when buying a home.

Buffalo, New York
This town that borders Niagara Falls is Number 10 on the Forbes list of Best Places in America to Raise a Family. Buffalo was ranked highly because of its average household income and low cost for owning a home in the town. It also has a thriving economy based on the tourism to Niagara Falls.

Albany, New York
This beautiful city in upstate New York is a major draw for families looking for a quiet place to settle down. It has a low crime rate and high rate of home ownership. Albany is also rich in historical significance as it was the first official capital of New York so it has sites that have been around for more than 400 years. There are free concerts during the summer and many more events going on that attract families to the city.

Knoxville, Tennessee
This southern metropolitan town is nestled near the Great Smoky Mountains and surrounded by green trees and amazing views all year round. According to Forbes, the town has low home ownership costs but it also has a thriving economy. Forbes has also named Knoxville as one of the Top 5 Cities for Business and Careers in the last couple years, placing it just behind metropolitan cities like Los Angeles and New York. The median price for a home in this Tennessee town is roughly $185,000. Major employers in the city include Jewelry Television, HGTV, EdFinancial Services, Bush Brothers and Company and AC Entertainment, just to name a few.

Pittsburgh, PA
This home of the Steelers and Pirates ranks highly on the list of best places to raise your family for several reasons. With a population of about 335,000 residents, Pittsburgh is always included on the list of the best 20 places to live rated by the Places Rated Almanac. Its low cost of living means lower median home prices than in other parts of the country and the town is also positioned in an area that has very little chance of experiencing natural disasters like tornadoes, earthquakes and hurricanes. According to the 2005 edition of The Economist, Pittsburgh was rated as one of the two most livable cities in America and the 26th most livable in the entire world.

If livability and factors like these influence your decision when buying a home, keep coming back to read more. We will be posting more of the top cities for raising your family and getting the most for your money this week and in the future.

With mortgage rates so low these days, many first time home buyers are jumping into the market to purchase a home. One of the most difficult parts that they may face about buying a home is deciding on your offer amount before the transaction even begins. Lowballing, or offering a bid that is way below the asking price, could get you a great deal if the seller is motivated to get rid of the house. However, it could also insult the seller and they might refuse to work with you any longer. However, if you offer a price that is too close to the asking price, you could be overpaying for a home that is not worth the cost. Here are some tips to keep in mind so you can come up with a decent offer somewhere in between.

Study Comparable Sales
The term “comparable sales” refers to the sale price of homes that are similar to the one you are considering buying. These homes have similar features, amenities and sizes. The best way to do this is to look for homes in the same neighborhood that have sold recently. This will give you a good idea about a decent offer that will neither insult the seller nor take too much out of your bank account.

Know Why the Seller is Selling
If you know the reason why the seller wants to sell their house, you can get a better idea of how much to offer. If they are selling it because it has some major problems that need to be fixed, you can be confident in offering a low price because you will have to put some major bucks into it after you take ownership. You might even be able to offer a lower price if the seller is excited to move for whatever reason. However, if the seller is just selling it because it serves as a second home or for some other reason that is not an emergency, they will probably only accept offers that are closer to their asking price.

Find Out What the Seller Paid
If the seller has only owned the home for a couple years, they will probably only accept something that is close to the asking price. Since the home has little to no appreciation over just a couple years, there is not much of a difference between their mortgage balance and the actual price of the home. If the seller did some remodeling, the value of the home may have increased since they bought it. Take these probabilities into consideration before making your final offer.

These are a couple ideas to keep in mind when calculating an offer price for a home you want to buy. The key is to be shrewd and knowledgeable when putting in a bid so you can get the best price that works for all parties involved in the transaction.

If you are looking for a home in a neighborhood that is within walking distance to nearby amenities, you are going to pay a little more than homes in other neighborhoods. That is not necessarily a bad thing, however.

A recent report of more than 94,000 real estate transactions in recent months studied the prices of homes in 15 markets and their proximity to conveniences in the area. The study showed that in 13 of the 15 markets, homes that had higher levels of “walkability” also tended to have higher values than the homes that did not.

The study was named “Walking the Walk: How Walkability Raises Housing Values in U.S. Cities.” It shows that homebuyers are willing to pay extra for a home located in a neighborhood that is just minutes away from quality schools, grocery stores, parks and other conveniences. Being able to walk to these places instead of needing to drive there is of utmost importance to homebuyers who want to enjoy their surroundings and get some fresh air as well. In addition to those benefits, these types of homes are believed to hold their value better than other homes. This means that when it comes time to sell, the owner will be able to get a better price for it because of its proximity to various features and conveniences in the surrounding area.

The study used calculations from algorithms based on addresses and the amenities nearby. Homes were given a score between 0 and 100 with 100 meaning that it was the most walkable. Any score above 70 meant that it was entirely possible to walk to the various businesses and other features. The formula also took into consideration the size of the house, the features, mortgage rates, the income level of the neighborhood and other factors. Depending on the actual market, a one-point difference in the “walk score” could mean a difference of $500 and $3,000.

One of the few places where this correlation was not made was in Las Vegas. In this city, a high walkability score showed lower home values. That’s probably because those neighborhoods are not in the best areas of the city for one reason or another. In Bakersfield, California, the walkability score showed no significant correlation to home prices. However, the study did not look into why these markets were different than the others. According to Matt Lerner, an official with Front Seat which is the company that created the Walk Score, the reason could be because of the number of foreclosures and trends within those areas.

Does the “walkability” of a particular neighborhood help you decide which house is best for you? Or does it even matter? Let us know your thoughts below.

As of this month, FHA mortgages are some of the best deals in town. According to David Stevens with the Federal Housing Administration, the agency is now the “largest source of home-purchase mortgages in the nation.” With more than $52 billion in purchase loans during the first quarter of this year, FHA mortgages account for about $6 billion more in mortgages than Freddie Mac and Fannie Mae.

This makes the FHA a dominant force in the mortgage industry. This also is the first time the agency has been in this type of position since the 1950s. But why is this significant to you and other homebuyers across the country?

Stevens is not excited about the dominant role the FHA is playing in the housing industry. He said the housing market is “purely on life support” and it is only being sustained by the federal government. A statement from Bloomberg News, a respected financial publication, also said that the FHA’s dominant role is a signal that the mortgage system is very weak right now.

Other agencies like Freddie Mac and Fannie Mae typically sell easier loans than the FHA. These and other lenders also offered lower interest rates than the FHA. However, as of just a couple years ago, the FHA mortgages only comprised about four percent of the entire housing market. For nearly two decades, the number of mortgages that the FHA accounted for did not even reach more than 15 percent.

But don’t let that discourage you. This is actually good news for the average homebuyer. Currently, you can purchase a home through the FHA system for about 3.5 percent down. You’re probably not going to find a rate like that anywhere else. On the down side, it might be difficult to find private mortgage insurance which is typically required for homeowners who put less than 20 percent down on their home. Even when homeowners find private mortgage insurance, it is usually much more expensive because of the small down payment.

Currently, about 12 percent of FHA mortgage loans are past due. This number is just below the percentage of subprime mortgage loans that are past due. The FHA has increased the fee that homebuyers will need to pay upfront in order to get an insured loan through the agency. That number has increased to 2.25 percent of the buyer’s actual loan amount. Buyers are also responsible for insurance and yearly premiums. These precautions are taken to help keep the number of foreclosures down.

If you want to get a home with a very low down payment, now is the time to do it through the FHA. Check out the options and see what it’s like to be a homeowner today.

During a time when home sales seem to be dwindling down, it looks like the federal government’s tax credits to entice homeowners worked to an extent.

A recent report shows that the sales of new homes increased by about 14.8 percent in April. According to the analysts in the housing industry, much of those home sales were due to first-time homeowners rushing to buy a home to take advantage of the huge tax credit which expired at the end of the last month. The U.S. Commerce Department reported that this was the largest increase in home sales since May of 2008. How’s that for a struggling housing market?

Another factor that helped increase home sales is the near record lows of mortgage rates that have held fairly steady for the last couple months. Both of these factors motivated many families to buy their first home and realize their dream. But are the incentives over?

According to Bob Jones with the National Association of Home Builders, there will be more incentives to encourage people to buy their first home and stop the cycle of renting or living with friends and family members. He says that mortgage rates will likely stay near where they are for awhile and the home prices probably aren’t going up anytime soon. Combined with the economy improving slightly, April could be just the beginning of a surge in the housing market.

Of the four major regions in the United States, three of them saw significant increases in home sales last month. The Midwest saw the largest increase with a 31.6 percent gain in sales. The South experienced nearly an 11 percent gain while the Western region had almost a 22 percent gain. The Northeast, however, stayed about the same and posted neither an increase nor a decrease in home sales.

Overall, the nation’s inventory of new homes that are available to buyers decreased in April to less than six percent. That equals a number that is about 212,000 new homes. That’s the fewest number of new homes that has been available on the market since 1968.

If you are looking for a new home, now is probably going to be one of the best times to jump into the market. The latest mortgage rates are back down to about 4.8 percent for a 30-year mortgage. For a 15-year mortgage, you can get rates around 4.25 percent. In addition, the average fees that homeowners were being charged have also gone down, making the overall price even cheaper. Get your application in today and take advantage of all of these financial benefits.