Question by JacobG: How much more should an APR be than the base mortgage rate?
What is a typical spread for the base mortgage rate to APR for a jumbo mortgage?
I am applying for a 30-year fixed jumbo FHA loan and was quotes a mortgage rate of 5% but with an APR of 5.69%. Is that spread typical (i.e. 0.69% more)?
Best answer:
Answer by Itchy1977
not that simple I’m afraid. APR is an incredibly complex equation to take into account compounded interest and any hidden charges.
The flat rate is the actual interest rate. APR is simply for comparing the overall cost between lenders. It actually bears no resemblance to the rate you pay.
What do you think? Answer below!
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Question by Marian: How did the real estate business collapse?
How many billionaires were involved in this scam? When & what year will this recover?
Best answer:
Answer by kemperk
in college classes on economics, sildenafil we learn two critical terms;
micro and macro economics. that means, local and Nationwide.
RE did not collapse everywhere but in parts of many cities and states.
Thus, your query, collapse, is accurate only in the micro sense; only certain city’s RE fell
heavily………..in some cities, no RE fell.
How many billionaires were involved? Few. Much of it occurred because speculators
in CA or a few other states, got pinched with high gas prices and stopped buying RE.
Also, unfortunately, the speculators forced prices up ARTIFICIALLY. By this summer
when things will bottom out, prices will not be LOW, but actually, where they were
10 yrs ago, before the artificially High prices started.
I know, factually, in 3-7 yrs, based on where a person lives, RE prices will be where
they were 2 yrs ago. IT is a researchable roller coaster. But it always ends higher
except where political injection or land harm occurs.
What do you think? Answer below!
Question by noggle4: Are Student Loans considered income to the IRS?
If I get student loans in the amount of 34900.00, order and put into a checking account (private student loan) is this income that I have to report?
Best answer:
Answer by jphenor
No it is a LOAN. You will have to report and gains from it, such as interest etc.
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Question by thatguy2007: Why do 30 year mortgage rates continue to rise, information pills while the fed continues to lower the fed funds rate?
It seems as though when money is more readily available, cost the 30 yr mortgage rates should drop.
Best answer:
Answer by Biggie @ Arbor Mortgage
The lenders are trying to recapture their losses. The fed funds are also for short term money loans & a mortgage is not a short term money loan.
Add your own answer in the comments!
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30 years is a long time.
Interest rates aren’t going to stay at 1% forever.
The interest rate cuts tend to affect short term borrowing.
the fed rate you’re refering to is the rate for overnight borrowing to what is in the industry referred to as window loans – loans that keep the banks liquid amounts where the government requires.
funding for mortgages, which are long term by nature, comes from investors. there are still too many nervous people hessitant to invest in mortgages again.
so basically, these two pools of money come from different sources and while one might be inclined to think they should move the same direction, there is nothing that really ties them together.
The Federal Reserve does not set mortgage rates. The market for mortgage backed securities drives rates. With the government taking over Freddie and Fannie, in the longer run rates should come down because the Treasury is guaranteeing those securities explicitly so there is no difference in the risk between Treasuries and Freddie and Fannie securities, but there is still a huge spread in the yields on those two investments. Once the market recognizes this, the yields on the MBS should fall in line with Treasuries of the same maturity. There may be a small difference for liquidity premiums and transaction cost, but not the huge difference that has existed and grown for the last year.
Talk about inflation has caused rates to rise in the last week or so, but flagging consumer confidence and, therefore, reduced spending should help to mitigate those concerns and rates will come back down.
I hope this answer was helpful.