30-YEAR FIXED MORTGAGE COULD BE GOING WAY OF DINOSAURS.Byline: GREGORY J. WILCOX Wilcox may refer to: Place names in the United States
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With San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. area housing prices seeming to set a record each month, this might not be the market for your father's kind of mortgage, that time-worn stalwart Stalwart A description of companies that have large capitalizations and provide investors with slow but steady and dependable growth prospects. Notes: The annual gain that would be viewed as the norm for investing in stalwarts is about 10% to 12%. known as the 30-year fixed. Lots of these traditional loans locking in the same interest rate for 30 years are still made but with prices pressing higher and higher, many buyers are opting for products that help them hang onto more of their cash or get more mileage MILEAGE. A compensation allowed by law to officers, for their trouble and expenses in travelling on public business. 2. The mileage allowed to members of congress, is eight dollars for every twenty miles of estimated distance, by the most usual roads, from his out of their money. Besides, in a highly mobile society it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have doubtful that today's buyer will actually write the 360 monthly checks it will take to pay off a 30- year loan. Today's mortgage market is peppered with options. Calabasas-based Countrywide coun·try·wide adv. & adj. Throughout a whole country; nationwide: launched a fundraising campaign countrywide; a countrywide search. Adj. 1. Home Loans, the nation's biggest mortgage company, lists 14 loan programs on its Web site. ``What appeals to consumers ... is the fact that the average fixed rate loan is paid off in five and a half years,'' said Doug Perry, first vice president at Countrywide. Consider the option for getting a loan to buy the median-priced home in the San Fernando Valley selling for a record $320,000 in June. It's possible to buy that property with no money down with an 80/20 loan, notes Perry. The buyer finances 80 percent of the price with a first mortgage and the balance with a 20 percent second. The interest rate will be about three-eighths of a percentage point to one-half a percentage point higher than what's charged for the 30-year fixed but the buyer doesn't have to come up with a down payment. Figure in taxes and insurance and the total monthly payment is $2,442. A year ago, June's the median price - the point at which half the homes sell for more and half for less - was $265,000. The same kind of loan package then would have resulted in a monthly payment of $2,033. Not a huge spread considering the price jumped almost 21 percent. This kind of loan is available on houses priced up to $500,000. Another option is the fixed adjustable. The interest is lower than for a traditional loan and fixed for three, five, seven or 10 years. Then it adjusts once a year. The shorter the lock-in period, the lower the interest rate. Perry says buyers can save several hundred dollars a month opting for this kind of product. Buyers of more expensive homes, say from $600,000 to more than $1 million, have money saving options, too. This is the interest only loan, in which the buyer doesn't pay down any principal for five years. ``The interest only loans are mostly popular with the high-end properties. (Buyers) would rather keep the money and use it for investments. They don't really care what's going on What's Going On is a record by American soul singer Marvin Gaye. Released on May 21, 1971 (see 1971 in music), What's Going On reflected the beginning of a new trend in soul music. with the mortgage. The property is appreciating and they are getting their money out of it that way,'' said Tom Carter Tom Carter may refer to:
For example, a typical loan for a $750,000 house would result in a monthly payment of $4,258. An interest only loan lowers the payment to $3,437. After five years the interest adjusts once a year. ``The buyer has got $800 a month to put in to what ever they want,'' Carter said. This wide variety of loan products, low interest rates, strong demand and generous credit guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. are helping offset the high prices. Combined, it's all keeping the market robust both locally and statewide, notes Keith T. Gumbinger, vice president of HSH HSH abbr. Her (or His) Serene Highness Associates, the nation's biggest supplier of mortgage data. It's one reason that when the housing market retreats, as it eventually will, the dip won't be as severe as in the early 1990s when prices crashed and foreclosures jumped. ``The mortgage markets are unbelievably liquid at the moment. Underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. standards are not nearly as strict as they were 10 years ago or five years ago,'' said Gumbinger. ``A couple of years ago all you had to be able to do was breathe and you got a mortgage. The credit spigots are about as wide open as they can get.'' |
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