Although the change is unlikely to be immediate, in the years ahead, Delaware residents who are seeking a home mortgage may be able to do so with lenders who use alternatives to FICO in determining credit scores. The bill is cosponsored by a Republican and Democratic senator and would require Freddie Mac and Fannie Mae to consider such alternative credit scores as FICO ScoreXD or the VantageScore.
Online banking has made the days of writing dozens of checks each month to cover household expenses a distant memory for many Delaware residents, and they can now use the internet to buy or sell real estate. Several companies already allow consumers to submit mortgage loan applications online, and websites like Zillow and Trulia let prospective home buyers view available properties on the internet and even take virtual tours. However, there are drawbacks as well as benefits when conducting residential property transactions completely online.
Delaware residents may have noticed the rise in interest rates, which is discouraging consumers from applying for mortgages. In fact, as the first week of October ended, there were 6 percent fewer mortgage applications around the country than the prior week, as reported by the Mortgage Bankers Association. The increased interest rates also affected the number of rate-sensitive home refinancing loan applications, which dropped 8 percent during the same week.
Near the end of September 2016, the Urban Institute revealed that improving bank conditions could also lead to changes in the housing market. Following the 2008 financial crisis, numerous banks stopped originating mortgage loans because of increased regulatory scrutiny and low profit margins. The Urban Institute's assessments suggest that this may be changing, which could prove advantageous for Delaware residents who are looking to purchase a home.
Delaware residents who are interested in selling or buying homes might be interested in the recent decline in the number of mortgage applications. The decline came as interest rates for home loans increased.
Most Delaware residents who take out a loan to buy a home or other piece of real estate will refer to the financial arrangement as a mortgage, but that term really applies to the interest that the lender has in the property rather than the loan itself. The mortgage assures that the lender's interests are protected should the borrower fail to make their required monthly payments.
"Redlining" is the practice of banks or mortgage companies selectively offering credit based on an applicant's race, color, sex, religion or national origin. Redlining was once a common practice in Delaware and other states, but it is now prohibited by Federal law. Hudson City Savings Bank announced on Sept. 24, 2015, that it has reached a settlement with the Department of Justice and the Consumer Financial Protection Bureau to pay $33 million for its discriminatory lending practices.
Homeowners in Delaware who are thinking about taking out a reverse mortgage home loan may have a few different options available to them. The most popular reverse mortgage loan is the home equity conversion mortgage, or HECM. This type of loan tends to have the lowest rates, and HECM loans are backed by the Federal Housing Administration.
People who are planning to purchase homes in Delaware may be pleased to learn that mortgage rates are at historically low levels. On July 30, the Federal Home Loan Mortgage Corporation, also known as Freddie Mac, released a report about mortgage rates called the Primary Mortgage Market Survey. It reported that average rates for 30-year fixed mortgages were around 3.98 percent for the week.
Many people in Delaware are paying more than they have to for their home mortgage, according to a report from Black Knight Financial Services. The report looked at data from May 2015 and found that 6.5 million mortgage borrowers could qualify for lower mortgage payments after refinancing or using other methods. Black Knight researchers looked specifically at borrower and mortgage data from 30-year fixed-rate loans to arrive at their conclusions.