Trinity: 'Soundest investment you can make' [The Decatur Daily, Ala.]

By Ronnie Thomas, The Decatur Daily, Ala.
McClatchy-Tribune Information Services

Dec. 19--Like the Somerville and Priceville areas of Morgan County, Trinity's residential housing market is growing.

Realtor Leighann Turner of RE/MAX believes the reason is that people want to be closer to the industries near Trinity.

She also believes U.S. Department of Agriculture Rural Development Loans have fueled growth in Priceville, Trinity and Somerville.

"Most people didn't know about the program, which has gained in popularity the last couple of years," she said. "They are zero down payment with low private mortgage insurance. Until two months ago, there was no PMI at all. Now it is still much less than any other mortgage."

Turner said area residents have been fortunate compared to surrounding states and larger markets.

"I think it's because of our industries," she said. "Our real estate is still the soundest investment you can make."

Kent Hollingsworth developed Mountain Cove subdivision off Mountain Home Road in Trinity and has 16 of 44 lots left in the subdivision. He said he has finished 17 homes.

Hollingsworth said a lot of Lawrence County residents are moving into Mountain Cove.

Trinity Mayor Vaughn Goodwin is excited about his town's future.

"We think we're going to start seeing more movement in residential building in the spring," he said.

Two other older subdivisions along Mountain Home Road, Blakely Estates and Hidden Creek, offer opportunities for homeowners.

Jason Owens continues to build in Stone Village beside West Morgan Elementary School on Old Alabama 24, and lots are available in Greenway Place at Ghost Hill and South Greenway drives.

In addition to residential building in Trinity, Goodwin has another reason to be positive.

"We just got our first walk-in, sit-down restaurant since Mountain Top Cafe on Old Alabama 24 closed years ago," he said.

Dirt Road BBQ opened last week in a seven-business strip mall on Gordon Terry Parkway.

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(c)2011 The Decatur Daily (Decatur, Ala.)

Visit The Decatur Daily (Decatur, Ala.) at www.decaturdaily.com

Distributed by MCT Information Services

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How To Avoid Mortgage Insurance?

Avoiding mortgage insurance is not always an easy thing to do, especially if the borrower is financially strapped. However, it can be done. What exactly is mortgage insurance? There is several mortgage-related insurance—mortgage protection insurance and private mortgage insurance (PMIs), to name a few. However, we will only be elaborating on PMIs when we use the term “mortgage insurance.” Mortgage insurance is therefore an insurance coverage that is required on the mortgage of a borrower who is putting less than a 20% down payment toward the purchasing price of a home.

Therefore to avoid paying mortgage insurance, a borrower must put down 20% or more toward the cost of the property. There are lots of other ways to avoid paying mortgage insurance, though. Another way to side step the extra expense is by taking out a second loan, sometimes called a piggyback loan or second mortgage that closes simultaneously with the first mortgage. The second loan can normally be a home equity loan or a home equity line of credit provided by the lender or lending institution.

By paying a little extra each month toward the mortgage payment, one can dramatically reduce the principal of the loan faster, which will facilitate the removal of mortgage insurance if one was used in attaining the mortgage in the first place. When 20% or more of the mortgage has been paid, a borrower with mortgage insurance can contact the lender of the mortgage and request a removal of the mortgage insurance. By law, the lender is required to remove the mortgage insurance when requested by the borrower, providing that 20% or more of the mortgage is paid.

Refinancing a home loan with a lender who does not require mortgage insurance can also help a homeowner do away with or remove mortgage insurance from a mortgage. People with good credit can ask their lenders to exempt them from paying mortgage insurance. Most banks are willing to work out deals with borrowers who have excellent credit because it makes good business sense. People with good credit are less likely to default on loans and are less risky for banks or other creditors. So lenders will be more apt to take a chance on credit worthy people and will be more than willing to wave the mortgage insurance requirement.

To conclude, avoiding mortgage insurance is not the easiest thing to do, especially when there is a limited in available funds. Banks and other lenders usually require borrowers to pay mortgage insurance when the down payment is less than 20% of the purchasing price of the home. However, there are many ways to get around paying mortgage insurance. Paying more than 20% down toward the purchasing price of the home and paying extra on the mortgage each month, so the principal can be paid down quickly are some of the ways people avoid paying mortgage insurance.

Analysts see fragmented mortgage insurance industry

The struggling private mortgage insurance industry is more fragmented than ever, as companies grapple with elevated levels of underwater mortgages and loan delinquencies, according to one equities research firm.

The Bedford Report released its latest outlook for The PMI Group (PMI: 0.21 0.00%) and MGIC Investment Corp. (MTG: 2.37 0.00%) this week.

The analysts who wrote the report are bullish on MGIC, despite the stock being down about 75% this year. The outlook stems from the company's main operating unit writing more new insurance in August, while the number of bad loans under MGIC's roof fell from July.

The analysts maintain a bearish outlook for The PMI Group, which was pulled under the umbrella of the Arizona Department of Insurance last month and forced to stop writing new business. The company also faces possible delisting from the New York Stock Exchange because its stock price has traded at less than $1 for more than a month.

Analysts last month suggested PMI's struggles could boost the market share of other mortgage insurers in the near-term.

Private mortgage insurers represented by the Mortgage Insurance Companies of America wrote $4.9 billion in new business in July even as some companies struggled with falling stock prices and uncertainty about liquidity levels.

The Bedford Report analysts report the trade group said the private mortgage insurance industry has raised more than $8 billion in new capital since the beginning of the credit crisis a few years ago, "which is a testament of investor confidence in the industry's ongoing role in the marketplace."

Insured at a high price

The strategy To work out whether I need mortgage insurance on my home loan.

Do I need to do that? Mortgage lenders will typically insist on mortgage insurance if you borrow more than 80 per cent of the value of your home. On the plus side, it means you can get into the market sooner by buying now rather than waiting to save the full 20 per cent deposit. However, this has to be offset against the cost of the insurance, which can run into thousands of dollars. Depending on your lender - and how good a credit risk you are - you might be able to borrow as much as 95 per cent of the property's value with mortgage insurance.

But many borrowers mistakenly think mortgage insurance covers them if they default on their loan. It is designed specifically to protect lenders losing money from defaults; it doesn't cover borrowers.

Advertisement: Story continues below So how does it work? You pay a one-off, upfront premium for the insurance, usually organised by your lender. The cost can often be included in your loan balance, so you pay it off over time. If you default on your loan and the lender doesn't recover the full amount owing when it sells your home, the lender can claim the difference from the insurer. If you want your own insurance, another product is available, known as mortgage-protection insurance, which covers mortgage payments in the event of death, sickness, unemployment or disability. However, you'll need to weigh up the likely benefits against the costs involved.

How much does mortgage insurance cost? It depends on your loan, how much you borrow and your deposit. The chief executive of RateCity, Damian Smith, quotes costs of about $4500 for insuring a $270,000 loan for a $300,000 property. He says the costs increase as you borrow more, with insurance costing about $17,500 for someone buying a $600,000 home with a 10 per cent deposit. Insurance can be more expensive for first-home buyers. GST and state stamp duty might also be payable on the premium.

Ouch! That seems high. Can I take the insurance with me if I switch lenders? Generally not. Smith says mortgage insurance costs are one of the biggest barriers to refinancing a home loan because your insurance policy will be cancelled and you might have to apply for fresh insurance cover with your new lender. If you've built up enough equity in your home before you refinance to get under the 20 per cent limit, you shouldn't need insurance on your new loan. However, if you still need insurance, expect to be charged the full cost by your new lender.

Both Australia's main mortgage insurers, QBE and Genworth, say a partial refund might be available if your loan is terminated in the first year or two. But this will depend on the arrangements made between your lender and the insurer. In some cases, no refund may be allowed in exchange for a lower upfront premium. You should check with your lender about this.

As part of its bank-account switching measures, the government will require lenders to provide borrowers with a fact sheet on mortgage insurance when they take out a home loan from July 1 next year. The fact sheet will set out the costs and benefits of the insurance and allow for a comparison of premiums and rebates. However, the government says it won't force the industry to allow borrowers to transfer their insurance if they refinance because of the complexity involved.

Many home insurance policies do not cover digital downloads

Music fans could be at risk of losing out financially as the majority of home insurance companies do not cover digital downloads, according to a recent study by Which?

The study by the consumer watchdog found that a third of leading home insurers’ standard policies fail to offer any form of protection, even though over 100m tracks are downloaded by Brits every year. Those that do offer cover generally limit it to around £1,000.

According to Which? only four providers, including HMV Digital, Play.com, 7 Digital and Tesco Entertainment, allow customers to re-download lost music . However others, which includes the popular iTunes, say in their terms and conditions that: "Products may be downloaded only once and cannot be replaced if lost for any reason".

Which? CEO Peter Vicary Smith said: "It's surprising that, at a time when the popularity of digital downloads is soaring, insurers aren't offering music lovers the protection they need. People who buy a lot of digital music should double check their home insurance policy to make sure downloads are covered. If they're not, we'd recommend switching to a provider that has entered the digital age."

How to Get Mortgages For Bad Credit

For people who want to pay off their debts and increase their credit score, they can always look for mortgages for bad credit. It is a loan which is derived from the home equity accumulated over the years in your home. This kind of loan can be quite beneficial for you since it can lower interest costs and monthly payments. It also consolidates your debts so that you can only pay once a month.

The two most accepted choices for bad credit mortgage loans are cash in mortgage finance and a home equity mortgage. These mortgages count on your equity, which will then be used to manage your debts. When you consolidate your debts, it can be arranged to combine all of your credit card payments, auto loans and other related debts into one easy monthly, lowered interest payment. In due time, you will notice that your credit score is improving.

When you apply for a bad credit mortgage loan, you need to increase your down payment as well as your cash reserves. A lower credit score means more money to pay for down payment. Credit scores below 600 require around 5% down payment. Lenders need to have confidence that you can still pay your loans even if you’re going through a financial situation.

You can always have the option to do your own research on this type of loan.

Mortgage Protection Insurance

A large amount of UK homeowners never consider mortgage payment protection insurance (MPPI) when taking out their home loan. Although MPPI is not compulsory it should be a priority for anyone with a mortgage.

For people who might have stretched themselves financially with their mortgage it is probably even more important to be covered in the event of unforeseen unemployment. Good policies will cover any bills related to your mortgage - including interest and repayments.

The State benefits for people in this situation are limited and they are means tested, so if you have savings you would be expected to use them first. Payouts can also take around 9 months to be made.

A good MPPI policy will start to pay one month after you are out of work (either through illness or redundancy) and typically last for 12 months. The one-year period is the time expected to be taken by people to find other employment or recover from illness or injury.

Insurance payments should start once you inform your provider that you're out of work and this is verified. Payments are usually made directly to your mortgage lender, although in some cases payments are made to the customer.

Although costs can vary between different providers, it is usually by a small amount. On an average mortgage payment of £650 a month, cover sold by most banks and building societies would cost about £450 a year.

Most people tend to buy MPPI from their mortgage lender at the time of the transaction or through a broker/adviser, but it can be bought as a stand-alone product from any provider. A list of MPPI providers can be obtained from the Association of British Insurer's website.

As with all types of insurance available, remember to shop around and be wary of lenders who insist on selling you their insurance.

Home Equity Conversion Mortgage Saver Offers 0.01% Loan Rates

In late 2010, the Federal Housing Administration launched a new type of reverse mortgage called a Home Equity Conversion Mortgage Saver, which reduces most of the 2 percent up-front insurance rate that borrowers have to pay from standard federal backed loans.

However HECM Saver – is offered only to homeowners 62 years old and over. The Saver’s up-front premium is only 0.01 percent. This up-front premium difference is huge, particularly as the loan rate increases. The current yearly fees that borrowers have to pay are similar as for an average reverse mortgage of 1.25 percent of the loan’s existing balance. Although Saver borrowers are limited only to borrow 10 to 23 percent less than the average version permits.

A perfect applicant for the HECM Saver is a senior citizen with a permanent income or resources who has long-term needs further than the need for temporary money. “The HECM Saver is ideal for their situation because there are enough proceeds [to do so],” says Beth Paterson of Reverse Mortgages SIDAC, St. Paul, Minn.

“The HECM Saver is a breakthrough product that will enable more seniors to access the advantages reverse mortgages can provide,” says Eric Declercq, national sales lead for reverse mortgages at MetLife Bank, Bloomfield, New Jersey. “It increasingly will become an important financial planning tool for America’s senior population looking to use the equity built up in their homes to finance a comfortable retirement.”

HUD introduces new variation of reverse mortgage

The U.S. Department of Housing and Urban Development (HUD) has announced a new reverse mortgage alternative aimed at cash-strapped seniors who are looking to reduce the up-front costs of tapping their home equity in exchange for lower loan proceeds.

The move comes on the heels of increases in the cost of mortgage insurance. Mortgage insurance is required on all reverse mortgages so that the lender is protected if the senior outlives the value of the home. It also protects the owner in the event the lender goes out of business.

Both issues come into play in a down real estate market, where many homes are worth less than they were at the time the reverse mortgage was issued.

A reverse mortgage historically has enabled senior homeowners to convert part of the equity in their homes into tax-free funds without having to sell the home, give up title or take on a new monthly mortgage payment. Funds obtained from the reverse mortgage are tax-free.

The new HECM Saver is a variation of the federally insured Home Equity Conversion Mortgage (HECM Standard), which allows owners older than 62 to stay in their homes for as long as they wish. More than 130,000 HECMs were originated last year.

According to Vicky Bott, HUD deputy assistant secretary, implementation of the HECM Saver will reduce the amount of mortgage insurance premium (MIP) required at closing. However, the reduced upfront cost also reduces the maximum amount an owner can take out.

The HECM Saver will have an upfront MIP of .01 percent of the maximum claim amount (the value of the home or $625,500, whichever is less). The HECM Standard upfront MIP remains at 2 percent of the maximum claim amount.

In addition, both products will have an annual MIP of 1.25 percent. This is an increase in the now HECM Standard MIP, which has been .5 percent annually.

The HECM Saver has principal limits between 10 percent and 18 percent less than the HECM Standard principal limits, thus offering consumers the option of lower proceeds in exchange for lower costs. According to HUD, the lesser decrease in principal limits will be for younger borrowers and the larger for older borrowers.

The changes were made because the funds for reverse mortgages have dwindled. The HECM portion of the overall FHA Mortgage Insurance fund pool of funds is down significantly and no private lender has resurfaced. Private reverse mortgage “jumbo” funds have virtually evaporated given the present credit crisis.

According to Peter Bell, president of the National Reverse Mortgage Lenders Association, reverse mortgages are increasingly being used by seniors to pay off defaulted mortgages and avoid foreclosure, thus preserving their ability to remain in their homes.

A reverse mortgage also can be an effective tool to relieve the burden of current loan payments or moving from the home. In many cases, homeowners use reverse mortgages to pay off existing “forward” mortgages, thus eliminating burdensome payments on their current mortgages and freeing up cash for living and health care expenses.

While reverse mortgages have been used primarily as a way to keep seniors in their homes, they have other uses as well. The Housing and Economic Recovery Act of 2008 approved the HECM for purchasing homes as well. The move allows older homeowners to make a large down payment on a new home and then utilize the reverse mortgage as permanent financing.

The same law reduced the maximum loan fee on reverse mortgages to 2 percent on the initial $200,000 of the home’s value and 1 percent on the balance thereafter, with a cap of $6,000. Previously, HECM fees were capped at 2 percent of the home’s value or the county lending limit, whichever was lower. These fees are in addition to the mortgage insurance premium.

If you are a senior in the market for a reverse mortgage, shop around for the best program for you. Some lenders have reduced fees for servicing, origination and title insurance for fixed-rate HECMs. Lump-sum payouts, monthly draws, lines of credit — or combinations of these options — are now part of the reverse mortgage mainstream.

Reverse mortgage with a twist

The U.S. Department of Housing and Urban Development has announced a new reverse mortgage alternative aimed at cash-strapped seniors who are looking to reduce the up-front costs of tapping their home equity in exchange for lower loan proceeds.

The move comes on the heels of increases in the cost of mortgage insurance. Mortgage insurance is required on all reverse mortgages so that the lender is protected if the senior outlives the value of the home. It also it also protects the owner in the event the lender went out of business.

Both issues come into play in a down real estate market where many home are worth less than they were at the time the reverse mortgage was issued.

A reverse mortgage historically has enabled senior homeowners to convert part of the equity in their homes into tax-free funds without having to sell the home, give up title, or take on a new monthly mortgage payment. Funds obtained from the reverse mortgage are tax-free.

The new HECM Saver is a variation of the federally insured Home Equity Conversion Mortgage (HECM Standard), which allows owners over 62 to stay in their homes for as long as they wish. More than 130,000 HECMs were originated last year.

According to Vicky Bott, HUD deputy assistant secretary, implementation of the HECM Saver will reduce the amount of mortgage insurance premium (MIP) required at closing. However, the reduced up-front cost also reduces the maximum amount an owner can take out.

The HECM Saver will have an up-front MIP of 0.01 percent of the maximum claim amount (the value of the home or $625,500, whichever is less). The HECM Standard up-front MIP remains at 2 percent of the maximum claim amount.

In addition, both products will have an annual MIP of 1.25 percent. This is an increase in the now HECM Standard MIP, which has been 0.5 percent annually.

The HECM Saver has principal limits between 10 to 18 percent less than the HECM Standard principal limits, thus offering consumers the option of lower proceeds in exchange for lower costs. According to HUD, the lesser decrease in principal limits will be for younger borrowers and the larger for older borrowers.

The changes were made because the funds for reverse mortgages have dwindled. The HECM portion of the overall FHA Mortgage Insurance fund pool of funds is down significantly and no private lender has resurfaced. Private reverse mortgage "jumbo" funds have virtually evaporated given the present credit crisis.

According to Peter Bell, president of the National Reverse Mortgage Lenders Association, reverse mortgages are increasingly being used by seniors to pay off defaulted mortgages and avoid foreclosure, thus preserving their ability to remain in their homes.

A reverse mortgage can also be an effective tool to relieve the burden of current loan payments or moving from the home. In many cases, homeowners use reverse mortgages to pay off existing "forward" mortgages, thus eliminating burdensome payments on their current mortgages and freeing up cash for living and health-care expenses.

While reverse mortgages has been used primarily as way to keep seniors in their homes, they have other uses as well. The Housing and Economic Recovery Act of 2008 approved the "HECM for Purchase" program. The move allows older homeowners to make a large downpayment on a new home and then utilize the reverse mortgage as permanent financing.

The same law reduced the maximum loan fee on reverse mortgages to 2 percent on the initial $200,000 of the home's value and 1 percent on the balance thereafter, with a cap of $6,000. Previously, HECM fees were capped at 2 percent of the home's value or the county lending limit, whichever was lower. These fees are in addition to the mortgage insurance premium.

Notable Mortgage Insurance Stocks Movers (ABK, PMI, HIG, AIG)

Ambac Financial Group, Inc. (NYSE:ABK) surged 15.06% to $0.898 on an unusual volume of 47.67 million shares after the troubled bond insurer reached a deal with bankrupt Lehman Brothers Holdings Inc. regarding claims the two filed against each other. Ambac Financial Group, Inc. (Ambac) is a primarily a holding company. The Company, through its subsidiaries, provides financial guarantees and financial services to clients in both the public and private sectors worldwide.

The PMI Group, Inc. (NYSE:PMI) spurted 4.63% to $4.07 on an unusual volume of 9.39 million shares. The company said that it will host a conference call to review third quarter 2010 financial results on Thursday, October 28, 2010 at 9:00 a.m. PDT (12:00 p.m. EDT). Financial results for the third quarter of 2010 will be released at approximately 3:00 a.m. PDT (6:00 a.m. EDT) on October 28, 2010. Leon Cooperman, whose Omega Advisors Inc. disclosed a stake in mortgage guarantor PMI Group Inc., said the insurer will rebound after posting 12 straight quarterly losses.“We feel they’re a survivor,” Cooperman said in a telephone interview.

Hartford Financial Services (NYSE:HIG) declined 1.26% to $23.44 on a volume of 3.66 million shares. Connecticut State Treasurer Denise L. Nappier announced that, after a competitive bid process, she has selected The Hartford Financial Services Group Inc. to launch and manage CHET Advisor, a new advisor-sold 529 college savings program. TIAA-CREF will continue to manage the Connecticut Higher Education Trust (CHET). The stock has been moving within a range of $18.81-$30.46 over the past 52-weeks.

American International Group, Inc. (NYSE:AIG) climbed 0.12% to $40.79 on a volume of 2.99 million shares. International Lease Finance Corporation (ILFC), a wholly-owned subsidiary of American International Group, Inc. today announced the repayment of a $2 billion bank loan. PricewaterhouseCoopers LLP’s two- year-old, $97.5 million settlement with holders of American International Group Inc. securities is set to go before a federal judge next month.

Mortgages: the facts and the fiction

Want to buy a home but are confused by mortgages and frightened by financial advisers? Moneymadeclear, the government's independent guide to personal finance, has produced a series of guides and tools for home buyers.


The basics A 30-page guide, Just the facts about mortgages, explains the different types of mortgages and answers common questions. It is available at moneymadeclear.org.uk or by calling 0300 500 5000.


How much you can borrow Guardian Money has an interactive mortgage calculator where you can work out monthly costs. For example, it tells you a £100,000 loan over 25 years at a rate of 4.99% would cost £584.01 a month.


Finding a mortgage Study our best-buy tables or go to moneyfacts.co.uk. If you don't have a large deposit, you won't qualify for the lowest rates. Try the comparison tables at moneymadeclear.org.uk/tables for an unbiased list of providers. If you're not comfortable taking a loan without going into a branch, the best deals on the high street right now tend to be offered by HSBC and Santander.


The other stuff they'll push on you Sales people earn big commission from insurances to cover your loan, such as MPPI, ASU, critical illness and income protection cover. If your job is under threat or your health poor, they will be worth considering. Only buildings insurance is essential. Don't buy it from your lender – try the main comparison sites (moneysupermarket/Confused/gocompare/comparethemarket), and remember to shop around for a new quote every year. Ignore lenders who insist you have to take out their insurance to get a mortgage. You don't.


Solicitors and conveyancing Direct.gov.uk has a guide on the various stages of buying, from making an offer to exchanging contracts. You can use a solicitor, (lawsociety.org.uk), a licensed conveyancer (conveyancer.org.uk), or do it yourself.


After you move in Try the BudgetBrain.com site to work out how much you've got coming in, and your outgoings. There are tips for overspenders.


Staying in control Falling behind with your repayments? Moneymadeclear has a Problems paying your mortgage guide, which explains what you can do, sets out what help is available and answers common questions.


It says: "Speak to your mortgage lender … All mortgage lenders regulated by the Financial Services Authority have to consider your circumstances, and will have procedures for dealing with cases like yours."

Refinancing: Whom Can You Trust?

With mortgage rates falling to record lows this summer and the housing market showing signs of a pulse, refinancing activity is perking up.

It's too bad that so many people are relying on oversimplified advice and bad numbers to decide when to pull the trigger.

The refinancing equation has never been more complicated. While some borrowers are desperate to reduce their monthly payments, others are looking to build equity. Some are even treating their mortgage as an investment vehicle, sinking excess cash into their homes in order to secure a lower rate and cut future payments.

Yet most personal-finance resources these days don't account for situations like these. Even essential factors like tax rates and inflation expectations are often ignored in favor of simplistic calculations.

Many popular Web resources, in fact, are financed by lenders, mortgage brokers or "lead generators" that connect borrowers with banks. At times, their advice can be downright harmful.

That's because of the risk involved. Refinancing generally costs 3% to as much as 6% of the outstanding principal of the loan, with banks levying fees on everything from application fees and title searches to appraisal costs and legal expenses. (Mortgage "points" can add to the total, though they typically help reduce the interest rate and lower overall costs.)

Fees are often murky, too, making comparison shopping difficult. The best way to compare deals, says Melinda Opperman of Riverside, Calif.-based Springboard Nonprofit Consumer Credit Management Inc., is to consult with a housing-counseling agency approved by the U.S. Department of Housing and Urban Development.

Given such costs, you don't want to refinance often. Yet the advice coming from the mortgage world suggests you should be doing it regularly.

One particularly dubious idea gaining prominence is the "1% rule," which used to be the 2% rule when rates were higher. The gist: Refinance when you can knock a full percentage point off your rate.

Students 'should consider the value of their belongings' when searching for a house insurance quote

Students searching for a house contents insurance policy to cover them when they are away from their parent's home could do well to evaluate how much their belongings are worth.

This is according to Graeme Trudgill, technical and corporate affairs executive at the British Insurance Brokers' Association (BIBA), who explained that consumers should account for designer clothes, their computer, printer and gadgets like iPads - as when combined their value could be very high.

"People have a lot of stuff and you have got to make sure that you just add it all up. It doesn't take long - you can do a quick check and your insurance broker can help talk you through it to make sure you have covered everything," he continued.

However, students - of which UCAS states there will be 470,789 attending new courses this year - may not have to shell out for their own individual policy, as some providers offer home-from-home deals where parents extend their policy to cover the youngsters' possessions while they study elsewhere.

House insurance reminder for victim of distraction burglary

The victim of a distraction burglary that took place in Towcester may have been reminded about the importance of an up-to-date house insurance policy.

A woman was approached by a man on September 15th who claimed he needed to check the pipes in her property. While the lady was occupied with the first perpetrator, another entered the house and searched the rooms before leaving empty handed, About My Area reports.

The first male has been described as white, aged between 30 and 35, with a clean-shaven face and slim build.

He is also said to have spoken with a northern accent and was dressed in smart clothes at the time of the incident, which took place between 15:30 BST and 15:50 BST.

A female who carried out a similar offence in Plymouth recently has been found guilty of burglary and attempted burglary, according to the Herald. She entered homes on the pretence of looking for lost ferrets, while her accomplice made off with items of value.

More Borrowers Opt for ‘Cash-In’ Refinancing

CASH-OUT refinancing, in which borrowers pull out equity from their homes to finance everything from vacations to sports cars, were all the rage during the housing boom.

Now, as the nation continues to endure the slow, painful correction of that boom, another trend may be emerging: cash-in refinancing. In this case, borrowers put extra money into a transaction to obtain cheaper loans and pay down debts.

According to Freddie Mac, the government-sponsored entity that, along with Fannie Mae, helps set lending standards, 22 percent of homeowners who refinanced their mortgages in the second quarter of this year paid additional money at the closing to lower their principal balance. That ties the record for the third-highest “cash-in” refinancing — set in the fourth quarter of 2002 — since Freddie Mac began recording such transactions in 1985. The highest level was in the fourth quarter of 2009, with 36 percent of refinancing homeowners cashing in.

Freddie Mac’s chief economist, Frank Nothaft, linked the change to low interest rates on cash-equivalent investments like certificates of deposit. Consumers are finding that they can save more money on monthly interest payments by paying down their mortgages than by leaving their cash in banks, which are offering meager interest rates.

Indeed, mortgage industry executives said they had heard borrowers express such motives when choosing a cash-in refinancing strategy. But they said borrowers were also looking to qualify for a cheaper loan. Often, the more equity they have in their homes, the easier it is for them to qualify for certain loans and for lower interest rates.

Michael Moskowitz, the chief executive of Equity Now, a lender based in Manhattan, said that over the past year he had seen more borrowers add money to their mortgage refinancings with the aim of lifting equity levels high enough to qualify for a lower monthly payment.

Mortgage group spent $1.09M in 2nd-qtr lobbying

The Mortgage Insurance Companies of America spent $1.09 million to lobby the federal government on housing and other issues in the second quarter, according to a disclosure report.

That's up from the $670,000 that the trade group spent in the year-ago period, and about even with the $1.06 million it spent in the first quarter of this year.

The Mortgage Insurance Companies of America is the trade association representing the private mortgage insurance industry. Private mortgage insurance protects a lender against losses when a borrower defaults.

During the April-June period, the trade group lobbied the federal government on legislation related to the restructuring of government-sponsored enterprises such as Fannie Mae and Freddie Mac, according to the report filed on July 20.

The group also lobbied on appropriations for housing and insurance issues involving the Department of Transportation and the Department of Housing and Urban Development; mortgage insurance taxes; the Restoring American Financial Stability Act; and, provisions relating to mortgage insurance in the financial regulatory bill signed by President Barack Obama last month.

That bill included new funds to aid homeowners, including $1 billion for a new program being run by HUD to provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.

In the second quarter, the group lobbied the House of Representatives and the U.S. Senate, according to the report filed with the House clerk's office.

How to get a better rate on your mortgage

Mortgages are often one of the largest expenditures a household has. Such being the case, it makes sense to find ways to get a better rate on mortgage loans. Fortunately, several methods exist to obtain lower rates or at least work toward the goal of lower rates. The following techniques can be used toward obtaining a better rate on a mortgage.

• Mortgage Duration

Switching from a 30 year mortgage loan to a 20 or 15 year mortgage can also get you a better interest rate. This is because the lender will recover its money faster which in effect lowers its lending risk and lowering the rate. If a shorter-term mortgage is affordable, it can lead to a much faster payment of the principal value of the mortgage, and lessen overall loan cost significantly.

• Equity value

Increases in equity value, be they through market appreciation or extra payments into a mortgage can also lower lending risk. By having more value in a home, your chances of getting a better rate on your mortgage increases. This method is more likely to work if mortgage rates are steady or declining, as otherwise, the higher equity value is working against an increasing mortgage rate trend.

• PMI Insurance

Property Mortgage Insurance (PMI) is usually required on loans that have less than 20% of the total loan amount paid off. By surpassing this 20% requirement, PMI can be dropped leading to a lower monthly cost of the mortgage where PMI is included in the interest rate calculation. PMI can be lowered by making extra payments or by adding a down-payment on a refinance.

• Credit rating

A better credit rating usually leads to better interest rates so it follows a higher credit rating can lead to a better rate on a mortgage loan. If your credit rating isn't as high as it could be, it could be higher within a few months if basic, yet important steps are taken to rebuild credit rating.

• Refinance

Even with the same credit rating it may be possible to refinance at a lower rate if aggregate mortgage loan rates have moved down from the rate at which you originally financed your real estate. A refinance that drops Annual Percentage Yield (APY) 1% or more could be enough to cover any extra fees related to the refinance in addition to lowering total interest paid.

To get a better rate on a mortgage loan more than one of the above techniques may be used. This has the affect of compounding the value of the lower interest rate. For example, a home that is refinanced at a rate 1% lower than the original mortgage that is also reduced in duration by 5 years and has a down-payment that puts that principal higher than 20% lowers the interest in three ways. The total decline in interest rate may then, be higher than the original 1% lower refinance rate.

U.S. mortgage rates steady below 5 percent in week

NEW YORK, March 18 (Reuters) - U.S. fixed mortgage rates held steady under 5 percent over the past week, Freddie Mac (FRE.N) said on Thursday, amid signs that winter storms overcame low borrowing costs to quell housing activity.

The average 30-year mortgage rate was 4.96 percent in the week ended March 18, little changed from 4.95 percent a week earlier and 4.98 percent a year ago, the second-largest U.S. home funding company said.

Lenders charged 0.7 point in fees, on average, the same as the prior week.

To see more rates see TABLE at [ID:nWALIEE640].

Winter storms snuffed out home building in much of the country, dragging construction down 5.9 percent in February, while builder confidence unexpectedly fell in March.

Demand for mortgages also declined in the latest week even though 30-year loan rates held below 5 percent, the Mortgage Bankers Association said on Wednesday. [ID:nNYS007847]

Beyond the weather, many potential home buyers are hesitating with near double-digit unemployment and concerns about job stability at the forefront, economists and housing experts have said.

The housing market is not without some bright spots, as stabilizing or even rising prices are helping current owners slowly rebuild equity in their houses, Frank Nothaft, Freddie Mac chief economist, said in a statement.

"After losing almost $7.9 trillion in home equity since the end of 2006, homeowners regained almost $1.1 trillion over the past three quarters ending in 2009," he said, citing Federal Reserve figures.

The Fed -- the U.S. central bank -- this week restated its pledge to keep benchmark interest rates low for an extended period, part of sweeping efforts to restore health to the battered housing market and the economy, which is recovering from the worst recession in decades.

Mortgage rates are seen trending higher once the Fed ends its more than $1.4 trillion in mortgage-related securities purchases at the end of this month.

In its March housing and economic outlook, Freddie Mac forecast a 30-year mortgage rate rise to 5.6 percent in the fourth quarter. (Editing by Andrea Ricci and James Dalgleish)

New mortgage rules leave homebuyers confused

Frank and Susan Williams bought a house near Hamilton, Ont., this month, they followed a time-honoured tradition of using leveraged financing.

With mortgage insurance they only had to put down 5% of the $270,000 purchase price. They went with a closed variable rate at 2.25% and amortized the loan over 35 years. The deal was initiated with a mortgage broker, with Bank of Nova Scotia providing the financing.

"It's a three-bedroom bungalow. That was attractive to us. We have a dog and we like to do things in the backyard. We did not have the type of money we thought we'd have to put into a house. We said let's just bite the bullet and get this over with," Ms. Williams says.

And getting it over with was probably a good idea. First, they were in a rent-to-own arrangement and had to exercise their option to buy before August 2010. And second, based on pending federal rules for government-backed insured mortgages that come into effect on April 19, the Williams (not their real name) would probably not have qualified for the variable-rate mortgage. In fact, as recent arrivals from the United States and its housing crisis, their credit history might not have passed any stress test.

"We really came from the United States with nothing. Everything we had disappeared with the housing crisis. In areas that had bad loans all the houses just hit bottom. We were expecting US$250,000 out of our house but we got nothing," Ms. Williams says. They walked away from the whole mess.

But while the Williams might have had good reasons for leveraging to get their dream home -- they are firsttime buyers in Canada -- the new federal rules governing mortgages have been widely misunderstood. In fact, the biggest fear among the young and house-less is fear itself.

"There are a lot of rules that changed. But they weren't communicated very well," says Robert McLister, the editor of Vancouver-based Canadian Mortgage Trends (www.CanadianMortgageTrends.com).

Margo Wynhofen, of Grimsby, Ont.-based Verico One Mortgage Corp. ( www.mymortgageadvisor.ca) and vice-president of the Independent Mortgage Brokers Association of Ontario, says she has had to spend considerable time explaining federal Finance Minister Jim Flaherty's statement of Feb. 16.

"I had a lot of people misunderstand the announcement. So I had a lot of clients call me for clarification. There was an overwhelming sigh of relief," Ms. Wynhofen says.

Under current mortgage-lending rules, buyers with a down payment of less than 20% of the purchase price must purchase mortgage insurance, with the most common source being Canadian Housing and Mortgage Corp. The new rules affect only customers that are required to purchase the insurance.

Under the new rules, all buyers requiring mortgage insurance will have to meet the "ability to pay" for a higher, more expensive five-year fixed-rate mortgage even if they choose a mortgage with a lower interest rate and a shorter term.

"It's not just first-time homebuyers who are affected. It's anyone who wants a variable mortgage rate now who doesn't have one already, they now have to qualify at a higher interest rate. Some of them won't qualify. And that's fine so they'll just take a fixed rate. It's not the end of the world," Ms. Wynhofen says.

Bernice Dunsby, director of home equity financing at the Royal Bank, says the new rules might even help save first-time buyers from themselves.

"We believe the new measures will have a small impact on mortgage growth, if any. First-time buyers should not be any more concerned about these changes. In fact, I believe the changes will actually help first-time homebuyers to ensure that not only can they afford their home today but in the future, especially if interest rates rise," says Ms. Dunsby.

In some cases, the rules might be outdated before they are fully implemented. A growing number of homebuyers are forgoing the conventional mortgage and using alternative financial products. Take the case of London, Ont., accountant and recent homebuyer Phil Parkinson. Three years ago, he bought his first home with a fully secured line of credit offered through Manulife Financial Corp.

The Manulife One product provides up to 80% of the appraised value of your home. It can be used to pay off the balance of your existing mortgage, personal lines of credit and any other outstanding debts you might have.

"These operate on a variable rate. It's just like one big bank account. You can have your money deposited into the account, you can pay your bills. [As you deposit] you can knock your account down and lower your interest calculation. Theoretically, you don't have to pay anything expect the interest," Mr. Parkinson says.

Other highlights of the rules don't directly affect firsttime buyers. For example, the maximum amount Canadians can withdraw in refinancing their mortgages has dropped to 90% from 95% of the value of their homes. rule has created a mini-stampede.

"There is a bit of urgency now to get [a refinancing] done before April 19. People are chronically refinancing. I have clients that refinance every two to three years to take the equity out of their home to pay off credit-card debt. The home has become an ATM machine," Ms. Wynhofen says.

A January 2007 Statistics Canada study of personal debt concluded that "increasing mortgage debt for refinancing purposes or taking out home-equity loans implies that homeowners in both [Canada and the United States] are using their homes as a source of cash to finance their spending rather than as an investment."

And in an effort to contain the risks of real-estate speculation, as of April 19 the minimum down payment for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation rises from 5% to 20%.

As for ex-patriot Americans Frank and Susan Williams, they're pretty relieved about their fresh start with a new house.

"It's very different to get a mortgage here. It's a lot less hassle than in the United States," Ms. Williams says.

And because the Williams are not particularly worried about the new mortgage rules, they are already thinking about their next purchase.

"We might be able to buy a little place that's larger when we can leverage this up a bit -- maybe get something cheaper than this with more room,' Ms. Williams says.