Your Guide to Credit and Personal Finance

Making sense of house prices
By Marcie Geffner – LendingTree.com

It’s no secret that home prices have declined in many U.S. towns and cities. Indeed, the downward trend has been the subject of numerous newspaper headlines, not to mention plenty of cocktail party small talk, water-cooler chitchat and neighborhood gossip.

Yet home prices aren’t just a subject of idle conversation.

If you want to buy a home, prices determine which homes you can afford. Or if you already own a home, your home’s value affects whether you can refinance your mortgage, take out a home equity loan or line of credit, or stop paying for mortgage insurance.

Equity is king
Your home’s value is a component of your equity, which is the difference between the value and the amount you owe, often expressed as a percentage. For example, if you borrowed $270,000 to buy a $300,000 home, your equity at the time of purchase would be $30,000, or 10 percent. If the value of your home dropped, your equity would shrink as well. The more equity you have, the easier it should be for you to qualify for a loan, refinance an existing loan or sell your home, if need be.

Unfortunately, much of the readily available information about home prices can be confusing or misleading, which makes it harder to get a true picture of home values in your area. For example, national and local median home prices are widely reported, but don’t necessarily reflect the value of an individual house.

Online information can be confusing
Many people check Web sites that estimate home values to make sense of prices. Online price estimates can be interesting; however, keep in mind that they may not be based on enough accurate data to give a true picture of how much a specific home is worth.

For those reasons, national trends and online estimates may be better used as a point of reference than relied on to make major financial decisions.

A REALTOR® can help
If you’re looking for good information about home prices in your area, ask a local REALTOR to prepare a comparative market analysis, or “CMA.” A CMA should be based on recent sales prices of homes that are similar in size, location and condition to your home or the home you want to buy.

Now that’s data you can count on.

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16.4.2008 - Home Credit & Finance Bank (”HCFB” or “the Bank”), rated Moody’s Ba3/NP/D-, S&P B+/B, and one of the leading banks specializing in consumer banking in Russia, announces that the international rating agency, Standard and Poor’s, affirmed the Bank’s ratings on 15 April 2008.

New form could help mortgage shoppers
By Marcie Geffner - LendingTree.com

Borrowers, prepare to shop.

And, potentially, to save hundreds of dollars on your next home loan, thanks to a new federal government plan that would revamp how lenders disclose home-loan terms and costs.

The plan, proposed by the U.S. Department of Housing and Urban Development, includes:

• A new standardized Good Faith Estimate (GFE) form that will explain the terms and estimated costs of your loan.

• Limits on how much your lender can increase some of your settlement costs, so you won’t be surprised by inflated costs at closing. 

• Scripts that will be read to you at closing to help ensure that you understand the terms and costs of your loan before you sign off on all your paperwork. 

• An improved settlement statement that will help you compare your final costs to your good-faith estimate.

A good-faith estimate already is required when you apply for a loan, but the forms that are used today aren’t standardized and can be difficult for borrowers to understand. Different lenders may not list the same costs in the same way and the form may not fully disclose all of the important terms of your loan.

The proposed standardized GFE will clearly detail the terms of your loan, including your interest rate and monthly payment, whether your rate and principal balance can increase, and if so, by how much, and whether your loan has a prepayment penalty or balloon payment. It also will consolidate your costs into categories and display a total of the estimated charges on the first page.

The plan is HUD’s response to a study that found many homeowners didn’t understand key terms of their own mortgage. The study concluded that clearer disclosures could help borrowers recognize loan costs, which would help them understand their loan and make better-informed decisions.

HUD’s consumer testing found that consumers were able to select the lowest cost loan more than 90 percent of the time when the proposed new form was used–a huge improvement over the typical situation. Consumers also said they liked the enhanced disclosures and scripts.

The new form won’t be official until after a comment period, and even then, it could be changed or abandoned. But if you think it might help you shop for a mortgage, you may want to print it out the new GFE form from HUD’s Web site and ask your lender to walk you through it.