Don’t Borrow Against Your Retirement Plan!

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You are already dealing with increasing debt. Suddenly, you find yourself with an unplanned expense that you cannot afford. You look longingly at your 401(k) balance. If only you could access some of that money to meet your current needs….

In many cases, you can access that money without penalties by borrowing from your 401(k) — but most experts agree that borrowing against your retirement plan is a bad idea, for a variety of reasons.

Borrowers may not understand the long-term harm that they are doing to their retirement account, or they may understand it but still rationalize a retirement-backed loan as their best option. Greg McBride, Chief Financial Analyst at Bankrate.com, uses the example of borrowers thinking that they are harmlessly paying money back to themselves but forgetting about compounding and the time value of money.

Such borrowers do not realize, says McBr…

Loan Fees 101

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Many sources are available to define and outline the fees that are associated with mortgage loans, but what about personal loans? Generally, personal loans are unsecured loans that are not tied to any form of collateral that can be taken over by the lender in case of default, such as a house with a mortgage loan or a car with a dealer-financed auto loan.

Potential loan fees in these cases are similar to mortgage and auto loans, except that fees relating directly to the collateral do not apply (think dealer delivery charges for an automobile or appraisal fees for a mortgage). Here are the personal loan fees that you are most likely to encounter.

  • Origination Fee – Just as in a mortgage loan, an origination fee is essentially a fee that covers the lender’s costs of processing the loan. Origination fees are usually a percentage of the amount of money …

Subprime Loans – Should You Take the Risk?

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Subprime Loans are Back

Since the housing crisis began over a decade ago, subprime mortgage loans basically disappeared – thanks to regulatory actions from government and self-preservation for both lenders and borrowers. The effects of borrowing more than you could safely afford to repay became obvious to all parties.

Subprime mortgage loans have been making a slow comeback over the last decade, driven by years of pent-up consumer demand and lending institutions competing for more business.

If you have borderline or poor credit (credit scores in the 580-669 range or below), lenders are devising new ways to offer you a mortgage loan. Are you ready to take advantage of these offers – and, even if you are, is a subprime loan the best choice for you?

Increased Risk But Greater Scrutiny

Data from the Mortgage Bankers Association (MBA) shows that during the first quarter of 2007, approximately 13% of all residential mortgage loans we…

Video: Which Type Of Mortgage Lender Should You Use?

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What is the difference between a mortgage broker and a loan officer? Which should you use for your mortgage? Casey Fleming, Mortgage Advisor at C2 Financial, explains in which situation to consult each of these lender types in our exclusive video above.

MoneyTips is happy to help you get free mortgage and refinance quotes from top lenders.

1 Out Of 5 Borrowers Unhappy With Their Mortgage Lender

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“I could have done better.” With respect to mortgage lenders, approximately one-fifth of homebuyers felt this way last year, according to the 2016 J.D. Power US Primary Mortgage Origination Satisfaction Study.

The study found that 21% of all homebuyers and 27% of first-time homebuyers regretted their choice of mortgage lender. Discontent fell into two general categories: lack of communication and being steered toward a specific mortgage product.

A full 72% of those regretting their choice noted pressure to choose a specific product, leading some consumers who received a good deal to report “happy buyer’s remorse.” A perception of unclear choices or lack of control dissipated the satisfaction of a good deal. The common thread in both sources of discontent is that customers can feel disengaged, with their interests being placed well below the bank’s interests.

How c…

Banks Now Provide Fewer Than Half Of U.S. Mortgages

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Recent research shows that as banks step back from offering risky loans, non-banking lenders have stepped in to fill the breach. Though banks once ruled the mortgage sector in the U.S, they now have less than a 50 percent share.

According to the latest figures, the amount of mortgage dollars offered by traditional banking institutions dropped in the third quarter of 2016. With many non-banking lenders willing to take on potentially riskier loans, these newer facilities provided 51 percent of the home loan lending.

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Lower Mortgage Rates Accessible With Consistent Employment

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Buying property is one of the largest purchases and biggest financial commitment that most Americans will make. With real estate values rising beyond inflation rates, this has become truer since the late 1990s. For borrowers, it’s important to take control of homeownership, including the costs involved.

One of the most important factors lenders look at is a borrower’s financial history. Perks are available for those who have worked in the same place for many years, or who have been growing their annual income at a consistent rate. …

New Mortgage Programs Give Hope To Homebuyers

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The past few years have been tough for prospective homebuyers, with many finding it almost impossible to qualify for mortgages. However, several new programs have come into effect, helping creditworthy borrowers get on the property ladder.

Over recent months, things have begun to ease. For example, some new terms now include a down payment of between 1 and 3 percent. These come without monthly home loan insurance charges, which makes taking out a mortgage more affordable. Debt-to-income (DTI) levels have also been stretched towards 50 percent while definitions of what qualifies as income have been loosened. Underwriting has become more flexible, accepting that there are often multiple earners in a household who can contribute to expenses.

Government Ordered To Release Documents To Mortgage Investors

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Federal Judge Margaret M. Sweeney has ruled that the U.S. government acted improperly when it failed to release over 12,000 documents specific documents to investors in Freddie Mac and Fannie Mae. These investors sued the government in 2013, following the seizure of profits from the two mortgage companies. Sweeney ordered the government to release the documents immediately.

Investors filed the lawsuit four years after the government took direct control of Freddie Mac and Fannie Mae, following the financial crisis that left the mortgage industry close to collapse. In 2012, however, the government began removing funds from the two ent…